61.5% tax relief on pension contributions (Scotland)

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 positoin before and after the payment of the pension contribution

Taxable salary before is £125,000 and after is £125,000
Personal Allowance before is zero and after is £12,500
Employee NI contribution before is £6,360 and after is £6,360
Employer NI contribution before is £16,037 and after is £16,037
Income Tax before is £44,917 and after is £34,542
Pension contribution (net) before is zero and after is £20,000
Employer pension contribution before is zero and after is zero
Income after tax before is £73,723 and after is £64,098

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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.