70 still working

Paulasboy

I have 3 pensions from employment within the public sector plus my state pension and I have a 20hr per week job (because I choose to work). So my income is over £50k and I'm being bashed by tax. The job I have offers a pension scheme should I join it and can i use it to get below the £50? I saw something about salary sacrifice but I don't understand it. I dont pay NI so the recent cuts haven't helped me and all the pension increases have gone straight back in tax.

Brie

Salary sacrifice should help with some tax I think.  Basically you get your salary but the pension contribution is taken off it (sacrificed) prior to any tax or NI is calculated.  So you pay a little less tax.  If you were paying NI that would make a difference too - I don't know if your employer has to pay NI even though you're not but that's there issue.  

Have you had a look at what reducing your hours slightly might do for your tax situation?  I know lots of people volunteer rather than work for a wage once they retire as it keeps them busy and their brain working and gives structure to their week.  I'm getting SP and 2 other pensions but work 14 hours a week for a pittance at a charity but it's something I find challenging.  My game plan is to drop my paid hours in a couple of years but continue working for the organisation as a volunteer in a non supervisory role.  I figure by then I'll know better what to do with some investments and DC schemes I have made decisions about yet.   

DullGreyGuy

You will be getting over 50% of any recent increases so not true to say it all goes back in tax.

You can pay into a pension if you wish, the former age limit of 75 was removed. 

badmemory

You could always stop taking your state pension until you stop work.  It will increase at 1% for every 9 weeks.

Paulasboy

DullGreyGuy said:

You will be getting over 50% of any recent increases so not true to say it all goes back in tax.

You can pay into a pension if you wish, the former age limit of 75 was removed. 

HMRC say I will be paying £2k more in tax 24/25 than I was I 23/24 they have moved my from T12 to T23 tax code so that does swallow up any increases

chrisbur

On total taxable earnings that fall between 50270 and 100000 the tax rate is 40% on that part above 50270.  Tax payable on an increase in those earnings will be 40% of the increase so you will always be left with 60%.of the increase.  May be complicated during the year by multiple streams of income and the HMRC estimated tax codes issued may not be 100% correct but the final result will be that you get 60% of any increase.

EDIT  A change of code from T12 to T23 will very slightly reduce the tax you pay on this income. Though of course if the income has gone up that may well cancel out the tax reduction and result in a higher tax figure but the tax rate will still be 40% and 60% will go to your net income.

Albermarle

If you are a member of a workplace/employer pension scheme, there are three different methods that the employer can use to take pension contributions from your salary and salary sacrifice is one of the methods the employer can choose to use. 
Apart from tax relief on contributions, it is always recommended to join a workplace pension scheme if it means your employer will contribute.

penners324

You could retire. Then your no salary to tax