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Is company SIP worth it?

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  • Johan007
    Johan007 Posts: 12 Forumite
    Thanks to the posts here I am going to be more cautious and looking to stop contributing as I have a fair amount in there now.

    I am at a conundrum. For one year only I am lucky to get a large salary supplement that takes my earnings to:

    (Salary + Supplements) - Pension = £42,350

    Should I be awarded a £1000 bonus for example this will take me onto the higher rate of TAX at 40 percent on that bonus.

    Now if I pay £1200 a year into a SIP…

    (Salary + Supplements) – Pension – SIP = £41,150

    …should this reduce the amount of TAX on my bonus to 20 percent?
  • tomo21217
    tomo21217 Posts: 1,518 Forumite
    Johan007 wrote: »
    Thanks to the posts here I am going to be more cautious and looking to stop contributing as I have a fair amount in there now.

    I am at a conundrum. For one year only I am lucky to get a large salary supplement that takes my earnings to:

    (Salary + Supplements) - Pension = £42,350

    Should I be awarded a £1000 bonus for example this will take me onto the higher rate of TAX at 40 percent on that bonus.

    Now if I pay £1200 a year into a SIP…

    (Salary + Supplements) – Pension – SIP = £41,150

    …should this reduce the amount of TAX on my bonus to 20 percent?

    Yes if the sip payment comes out as salary sacrifice.
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