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FOR ADVISERS ONLY

60% tax relief on pension contributions

The example below shows the difference a personal pension contribution of £25,000 can make for a client with income of £125,000.

This table shows the position before and after the payment of the pension contribution

Taxable salary before is £125,000.00 and after is £125,000.00
Personal Allowance before is zero and after is £12,500.00
Employee NI contribution before is £6,360.00 and after is £6,360.00
Employer NI contribution before is £16,037.26 and after is £16,037.26
Income Tax before is £42,500.00 and after is £32,500.00
Pension contribution (net) before is zero and after is £20,000.00
Employer pension contribution before is zero and after is zero
Income after tax before is £76,140.00 and after is £66,140.00

 

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.