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Posted Fri, 02 Aug 2024 20:36:14 GMT by PandaPoppet .
I currently earn £44547 pa, but this is due to increase to £49036 in September. I have a pension pot of approx £115000 and want to drawdown some of it - either £20000 or £40000 (I haven't decided yet!). The drawdown would be to fund a repayment of a loan, and potentially also to fund some home improvements (hence the two amounts!). My question is - how will either of these drawdown amounts affect my tax? Will only the drawdown be taxed at the higher amount (it will take me into the 40% tax ), or will the wage from my current employment also be taxed at the higher amount? Thank you!
Posted Wed, 07 Aug 2024 08:37:09 GMT by HMRC Admin 25
Hi PandaPoppet,
You would pay Income  Tax at the higher rate on the income that is in the higher rate tax band
Please see rates here:
Income Tax rates and Personal Allowances
Thank you. 

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