Is it worth keeping gross salary under £150k for the tax year?

RoseLondon

To begin with, I do feel the need to mention that both my husband and I don't have much pension in the pot, as we only moved to this country 10 years ago. So, at our mid-40s, we do feel the pressure of building up our pension. 

My husband has moved on to his current job 2 years ago which offered a decent pay rise putting him at £120k a year. But during the pandemic, his company cut all employee's pay rate by 30%. So he didn't reach any critical number in the tax year 2020-2021 to worth any thoughts.

We've been talking about invest more into pension, either by salary sacrificed scheme or by pension investment fund managed by himself. But we are new to the topic, slow moving and did very little in action so far.

So we are a bit shocked (shouldn't, just were not paying enough attention earlier on) when I added up his payslip for last year realising his gross salary has already well passed £140. March will be the last month before end of tax year. His usual salary would push him over £150k. We are just wondering, if it's worth putting most of his salary for March into personal pension to benefit a bit tax saving. 

There are talks about £100k to £125k in many sites. But not much information on what happens for over £150. The only thing we are aware is the tax rate rises from 40% to 45%. 

Can someone kindly advise? Thank you very much.

kinger101

If he's able to do so, I'd recommend he contributes enough to a pension to drop adjusted net income below £100K.  This should be possible if there's annual allowance from the previous year.

Salary sacrifice is more efficient than a SIPP (as there's an NI saving too), but increasing SS in March won't get him below £100K.  If you don't need to, makes no sense to pay 60% tax if you're worried you need to save more into pension.