Staying under the 40% tax bracket?

Albermarle

Yeah I agree it is low , Been paying it for a few years now at this rate as always feel I would like to have and enjoy money available to me now as never know if we reach Pension age to enjoy it

You will be able to take money from the pension at age 57 (maybe 58 by the time you get there) . The chance of a 40 year old reaching age 57 is very high ( 99%?) Even the chance of a 40 year old reaching the current state pension age of 67 is high. The average lifespan for someone who has already reached 40 in the UK is around 83, which means 50% of people live longer than that.

The two usual issues with pensions, is that people underestimate how much they need to add to them, and they underestimate how long they are likely to live.

Also if you want to retire early, for example around 60, then you have to build up an even bigger pot.

Correct my employer contribution is 10% This is a good start, you should consider at least matching it and a bit more. Also do not forget to pay some attention to how your pension is invested. There are MSE forums for Investments and Pensions, if you are interested.

Nowherefast

Albermarle said:

Yeah I agree it is low , Been paying it for a few years now at this rate as always feel I would like to have and enjoy money available to me now as never know if we reach Pension age to enjoy it

You will be able to take money from the pension at age 57 (maybe 58 by the time you get there) . The chance of a 40 year old reaching age 57 is very high ( 99%?) Even the chance of a 40 year old reaching the current state pension age of 67 is high. The average lifespan for someone who has already reached 40 in the UK is around 83, which means 50% of people live longer than that.

The two usual issues with pensions, is that people underestimate how much they need to add to them, and they underestimate how long they are likely to live.

Also if you want to retire early, for example around 60, then you have to build up an even bigger pot.

Correct my employer contribution is 10% This is a good start, you should consider at least matching it and a bit more. Also do not forget to pay some attention to how your pension is invested. There are MSE forums for Investments and Pensions, if you are interested.

Yes I may look at maybe upping my end to £100 and employer adds 10% 

Sterlingtimes

I used many devices when I was employed to stay under 40%. I think not already mentioned are holiday buy/sell and shares options.

hoc

Sterlingtimes said:

I used many devices when I was employed to stay under 40%. I think not already mentioned are holiday buy/sell and shares options.

How would holiday buy/sell help? Sell and you get paid as income which is taxed. Buy and you are only reducing your tax because you've reduced your income.

kinger101

hoc said:

Sterlingtimes said:

I used many devices when I was employed to stay under 40%. I think not already mentioned are holiday buy/sell and shares options.

 Buy and you are only reducing your tax because you've reduced your income.

You've answered your own question there.  If you consider the additional free time more valuable than the net pay (and associated benefits) it's worthwhile.

hoc

kinger101 said:

hoc said:

Sterlingtimes said:

I used many devices when I was employed to stay under 40%. I think not already mentioned are holiday buy/sell and shares options.

 Buy and you are only reducing your tax because you've reduced your income.

You've answered your own question there.  If you consider the additional free time more valuable than the net pay (and associated benefits) it's worthwhile.

The point of such discussions is to learn of tax optimisation to maximise given income. It should be obvious you will pay less tax if you earn less. By that logic go further with part time or quit your job.

kinger101

hoc said:

kinger101 said:

hoc said:

Sterlingtimes said:

I used many devices when I was employed to stay under 40%. I think not already mentioned are holiday buy/sell and shares options.

 Buy and you are only reducing your tax because you've reduced your income.

You've answered your own question there.  If you consider the additional free time more valuable than the net pay (and associated benefits) it's worthwhile.

The point of such discussions is to learn of tax optimisation to maximise given income. It should be obvious you will pay less tax if you earn less. By that logic go further with part time or quit your job.

No, that's not logic.  That's being absurd.  Buying an extra week of annual leave and quitting your job is not the same.  

Furthermore, it's a valid option for OP to consider if it is available, considering they didn't want to work extra hours only to be taxed a 40%.

Personally, I'd consider pension first, but that's me.