How much pension should I contribute?
Bonuses, RSUs, BIK, other income
To reach ANI of £99,999
Contribute £10,001 per year
£833 per month
Total pension (existing + new): £10,001/year
Before vs after
| Before | After | |
|---|---|---|
| Adjusted net income | £110,000 | £99,999 |
| Income tax | £33,432.00 | £27,431.60 |
| NI | £4,210.60 | £4,010.58 |
| Student loan | £0.00 | £0.00 |
| Annual take-home | £72,357 | £68,557 |
Tax saved
£6,000
NI saved
£200
Student loan saved
£0
Total saved
£6,200
Your £10,001 pension costs you only £3,801 after tax relief (38.0% effective cost).
All thresholds at a glance
| Target | Additional pension | Tax saved | Effective cost |
|---|---|---|---|
| Under £100k (avoid 60% trap) | £10,001 | £6,000 | £3,801 (38.0%) |
| Under £60k (avoid HICBC) | £50,001 | £22,000 | £27,001 (54.0%) |
| Under £125,140 (clear taper)(already there) | £0 | £0 | £0 (0.0%) |
What is the 60% tax trap?
Between £100,000 and £125,140 your Personal Allowance is reduced by £1 for every £2 of income. That creates an effective marginal rate of 60% on that slice. Putting more into your pension (or using Gift Aid) lowers your adjusted net income and can restore your allowance.
Read more about the 60% tax trapSalary sacrifice vs relief at source
With salary sacrifice, pension is taken from your pay before tax and NI, so you save both. With relief at source, you pay from take-home and get basic-rate tax relief added to your pension; your ANI still drops, so you can escape the 60% zone, but you don't save NI.
Compare salary sacrifice vs relief at sourceDoes this affect my childcare eligibility?
Tax-Free Childcare and 30 hours free childcare use your adjusted net income. Keeping your ANI under £100,000 can help you stay eligible.
Tax-Free Childcare guideSpotted an error or have a suggestion? Let us know — we read every message.