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Work Place Pension contributions
GraveDisorder
Posts: 1 Newbie
in Cutting tax
Hi all
I am a 40% tax payer who contributes 9% to a work place pension. The contributions take me in to the 20% tax band. Will this change the tax I pay on savings interest - i.e., 20% not 40% ?
Thanks.
I am a 40% tax payer who contributes 9% to a work place pension. The contributions take me in to the 20% tax band. Will this change the tax I pay on savings interest - i.e., 20% not 40% ?
Thanks.
0
Comments
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GraveDisorder said:Hi all
I am a 40% tax payer who contributes 9% to a work place pension. The contributions take me in to the 20% tax band. Will this change the tax I pay on savings interest - i.e., 20% not 40% ?
Thanks.
Not necessarily, it depends on how much interest (or other taxable income) you receive.
You might be a basic rate payer on your earnings alone but the interest could take you back into the higher rate band.
If so you would get £500 interest taxed at 0% and the rest taxed at 40%.
If you are a basic rate payer with all taxable income factored in the first £1,000 of interest is taxed at 0%.0
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