Tax code

nikkibhatt1

I am getting a pension and also have a full time job, both combined income is under £50K. Does it make any difference which one I allocate my yearly allowance of £12,570 to?

Dazed_and_C0nfused

Not really no.

Key thing is to make sure HMRC's estimate of your taxable pay at each source (amount expected on each P60) is accurate.  You will have a much better idea of this than they tend to do as you will be aware of potential pay rises, pension increases, changes in working hours etc.

Changing things part way through the tax year can being complications though.

LHW99

Is the pension state pension?

If it is then that is paid gross, and you have no choice but to have the allowance allocated to the SP.

Albermarle

LHW99 said:

Is the pension state pension?

If it is then that is paid gross, and you have no choice but to have the allowance allocated to the SP

I think you meant to have the allowance allocated to the job ?

Mutton_Geoff

If it's a private pension then I would allocate it to that on the basis that if your employment then uses the balance, any additional income (overtime/bonus etc) will more likely be taxed correctly.

horsewithnoname

nikkibhatt1 said:

I am getting a pension and also have a full time job, both combined income is under £50K. Does it make any difference which one I allocate my yearly allowance of £12,570 to?

Allocate your allowance to your pension as that will continue until you die, whereas your employment may well cease at some point.

Dazed_and_C0nfused

horsewithnoname said:

nikkibhatt1 said:

I am getting a pension and also have a full time job, both combined income is under £50K. Does it make any difference which one I allocate my yearly allowance of £12,570 to?

Allocate your allowance to your pension as that will continue until you die, whereas your employment may well cease at some point.

That may well be the case here, and will be for many other people, but pensions flexibilities mean this will no longer be as common as it once was.

Silvertabby

When I was still working I applied my tax code to my salary, with my RAF pension being taxed at BR.  Less chance of confusing the payroll bods that way!  

horsewithnoname

Dazed_and_C0nfused said:

horsewithnoname said:

nikkibhatt1 said:

I am getting a pension and also have a full time job, both combined income is under £50K. Does it make any difference which one I allocate my yearly allowance of £12,570 to?

Allocate your allowance to your pension as that will continue until you die, whereas your employment may well cease at some point.

That may well be the case here, and will be for many other people, but pensions flexibilities mean this will no longer be as common as it once was.

Good point, I didn’t think of that 👍

LHW99

Albermarle said:

LHW99 said:

Is the pension state pension?

If it is then that is paid gross, and you have no choice but to have the allowance allocated to the SP

I think you meant to have the allowance allocated to the job ?Does it make any difference which one I allocate my yearly allowance of £12,570 to?

The OP asked

Does it make any difference which one I allocate my yearly allowance of £12,570 to?

As I understood it, the SP is taxable, but paid gross, hence it will use up the majority of the personal allowance, leaving a surplus of probably less than £2000, hence I assume there would not be an "allowance of £12,570" to allocate to either job?

Dazed_and_C0nfused

LHW99 said:

Albermarle said:

LHW99 said:

Is the pension state pension?

If it is then that is paid gross, and you have no choice but to have the allowance allocated to the SP

I think you meant to have the allowance allocated to the job ?Does it make any difference which one I allocate my yearly allowance of £12,570 to?

The OP asked

Does it make any difference which one I allocate my yearly allowance of £12,570 to?

As I understood it, the SP is taxable, but paid gross, hence it will use up the majority of the personal allowance, leaving a surplus of probably less than £2000, hence I assume there would not be an "allowance of £12,570" to allocate to either job?

The op actually has another thread here where it's clear it's not the State Pension.

https://forums.moneysavingexpert.com/discussion/6440559/tax-allowance#latest