How Pension Contributions Can Save 60% Tax for High Earners

For many professionals earning over £100,000, the gradual removal of the personal allowance creates a hidden tax trap. Between £100,000 and £125,140, every extra pound of income is effectively taxed at 60%.

Case Study

A client earning £130,000 was losing their full allowance. I advised them to make a personal pension contribution of £31,000, reducing their taxable income to £99,000.

The Results

Restored the full £12,570 personal allowance

Received an additional 20% tax relief on the contribution (£6,200)

Secured a £6,200 tax rebate

Total boost: pension fund increased by over £37,000 for a net cost of £18,600.

Why It Matters

This isn’t just about tax savings. It’s about strategic use of pension allowances to grow wealth more efficiently while keeping more of your hard-earned income.

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