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Posted Mon, 18 Sep 2023 08:07:59 GMT by pmg102
Let's say you earn gross £60,000. This makes you a higher rate tax payer. As a result your personal savings allowance will be £500 -- any savings interest above that level will be taxed, at 40%. However, what if you contribute £1,000 a month to a workplace pension through auto-enrollment? Employee contributions, I mean. Well then is your 'effective taxable' income reduced by £12,000 to £48,000 and are you now no longer a higher rate tax payer, and does your savings allowance increase to £1000? TLDR: Will increasing my workplace pension contributions to increase my personal savings allowance?
Posted Wed, 27 Sep 2023 12:16:26 GMT by HMRC Admin 10
You are correct.

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