Pension Higher Rate Tax Relief

[Strudul]

I'm trying to understand pension tax relief and work out how to be most efficient and avoid higher rate tax.

Hypothetical scenario:
Taxable pay of £60k (existing sal sac contributions already accounted for)
Standard 1257L tax code
Higher rate tax bracket of £50,271

How much would need to be contributed to a relief at source private pension (contribution made from net pay) to avoid paying any 40% tax (or claim it all back).


£60,000 - £50,271 = £9,729

As this will be taxed at 40%, am I right in thinking only 60% of that figure (£5,837.40) would need to be contributed?
20% would be automatically topped up by the scheme into my pension and the other 20% would need to be claimed back manually from HMRC?

Or do I need to contribute 80% (£7,783.20) as the 20% I manually claim won't be going into my pension?

Thanks in advance

Edited by Strudul on Tuesday 21st March 09:51

[steve_n]

Strudul said:

Or do I need to contribute 80% (£7,783.20) as the 20% I manually claim won't be going into my pension?

This.

[Strudul]

steve_n said:

Strudul said:

Or do I need to contribute 80% (£7,783.20) as the 20% I manually claim won't be going into my pension?

This.

Thanks. Nice and easy.

Follow up question based on information here.

If savings interest has also been earnt, even though it's under the £1k tax-free allowance, does this need to be accounted for and require an appropriate contribution?

E.g. £1k earnt in interest from current / savings accounts, therefore additional £800 contribution required, increasing the total contribution required in the hypothetical above to £8,583.20?

Or as the 40% bracket still allows £500 tax free, would it only need an additional £400 contribution?

Edited by Strudul on Tuesday 21st March 12:00

[steve_n]

Strudul said:

Or as the 40% bracket still allows £500 tax free, would it only need an additional £400 contribution?

This.