Pension tax planning for high earners

With continuing intense pressure on government finances, the October 2024 Budget confirmed that the overall tax burden in the UK will remain at an historically high level for years to come, with higher earners continuing to shoulder most of the burden. Higher and additional rate taxpayers currently pay over two thirds of all income tax.

One in five income tax payers is currently taxed at the higher or additional rate, up from one in seven four years ago, and the proportion will continue to increase because of frozen tax allowances and bands until April 2028. The threshold for paying additional rate tax reduced from tax year 2023/24 from £150,000 to £125,140, while income between £100,000 and £125,140 is effectively taxed at 60% (67.5% in Scotland) because of the tapered reduction to the personal allowance.

The Guide covers the following topics:

• The tax burden on high income
  The tax consequences of high income

• The power of your pension
  How you can use pension contributions to reduce your tax bill

• Self-invested personal pensions (SIPPS)
  The investment option that lets you control how and where your money is invested

• Pension withdrawals
  The tax-efficient way to access your money, when the time comes

Click here to download your copy of ‘Pension tax planning for high earners’.

Our full range of Key Guides can be found at:
www.cometwealth.uk/resources/key-guides

This publication is for general information and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of the law and HM Revenue & Customs practice as at 22 January 2025.