Paying more into a pension to reduce annual salary

kendricks1

Hi, I’ve just moved into the 40% tax bracket as other interest from savings combined with my salary has increased.
can anyone clarify in simple terms,if I pay more into my private pension or nhs pension will it be taken from my salary hence reducing my taxable income.
I hold a nhs and private pension which one is preferable to overpay.
thanks kindly 

ali_bear

Yes.

You would have to get your skates on if you are hoping to do it in the 24-25 tax year and it may already be too late for that. 

kendricks1

It’s really more for 25/26 as I’ve only just been informed by HMRC 

QrizB

kendricks1 said:

It’s really more for 25/26 as I’ve only just been informed by HMRC 

Ok, but you still have time to do it for 24/25 if it's relevant for this year too.

TheSpectator

kendricks1 said:

Hi, I’ve just moved into the 40% tax bracket as other interest from savings combined with my salary has increased.
can anyone clarify in simple terms,if I pay more into my private pension or nhs pension will it be taken from my salary hence reducing my taxable income.
I hold a nhs and private pension which one is preferable to overpay.
thanks kindly 

If it's paid into your private pension it won't reduce your taxable income but will increase the amount on which you pay 20% and reducing your exposure to 40% tax.

prowla

Does your company do a salary sacrifice scheme?

kendricks1

I believe so it’s a nhs pension.

Sarahspangles

kendricks1 said:

I believe so it’s a nhs pension.

The NHS pension is actually Net Pay. That means it is taken off your gross pay, before tax is calculated. So effectively that is how you get your tax relief. Salary Sacrifice is different - you give it up so it never appears on your payslip. You also avoid paying NI with that type.

It’s unlikely you would be able to increase your contribution this tax year so you need to pay into your private pension.