Tipping more into pension to get below 40% threshold
Discussion
Mrs 595Heaven did the NHS 'retire and return' late last year so is now a pensioner! Straight back to work the next day, albeit dropped her hours a bit.
Pension lump sum now in cash / Premium Bonds and getting a monthly pension payout alongside her salary, which so far is just going into cash savings.
I'm still working full time and have a defined benefit pension, as well as a standalone employer Additional Voluntary Contribution (sal sac) pension that I pay a % of salary into each month.
If I was to up the %age by a fair chunk to take me below the 40% threshold, I think I'd still get the 40% tax benefit on the AVC payment, but taxable earnings would be at 20% tax, which would be nice.
Am I right? Are there any downsides to doing this? From an overall income vs expenditure we'd be about the same, but building up a bigger AVC pension pot rather than cash savings.
Oh, and we're going to win the latest Omaze house in Norfolk which would help
Pension lump sum now in cash / Premium Bonds and getting a monthly pension payout alongside her salary, which so far is just going into cash savings.
I'm still working full time and have a defined benefit pension, as well as a standalone employer Additional Voluntary Contribution (sal sac) pension that I pay a % of salary into each month.
If I was to up the %age by a fair chunk to take me below the 40% threshold, I think I'd still get the 40% tax benefit on the AVC payment, but taxable earnings would be at 20% tax, which would be nice.
Am I right? Are there any downsides to doing this? From an overall income vs expenditure we'd be about the same, but building up a bigger AVC pension pot rather than cash savings.
Oh, and we're going to win the latest Omaze house in Norfolk which would help
Edited by 595Heaven on Sunday 19th January 17:18
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