Tax advise on crossing 125K

[PensionAdvicePls]

Hi all - I'm after some tax advice please.

I'm currently on just over 115K and I've been putting anything over 100K in pension. I'm about to go up to 143K (thanks to a promotion - yay!) and I wanted to ask what are my best options?

Should I continue putting everything over 100k in pensions? I'm aware I have a 60K limit and I'll need to check if that's feasible. Or shall I just take it? It's tempting to take it and put the additional money in an ISA towards a house deposit (we need to move to a bigger house)

From a day to day finances perspective, I don't really need the additional money apart from being able to build a pot for house deposit/home improvements.

TIA!!

Exactly. I wouldn’t trust a financial advisor with my assets anyway unless I knew them personally.
Just put the excess above £100k into your pension OP.

Similar situation here. I’m just paying the tax. Having the money in the here and now is more useful to me than having it in 20-odd years and I don’t really object to paying tax as a higher earner.

LOL. "Personally, I wouldn't trust a regulated-up-to-its-eyeballs profession but do take advice from me, some random off the internet"

Same here!

Calm down, I’ve never met one with any intelligence and I’m hardly offering a controversial opinion re. the pension. The FA will either charge for their “expertise” or take commission on their recommended products so they are hardly independent so I wouldn’t waste my money on that in the OPs situation.

This is what I would do, those pension changes are going to come around very quickly if there is no change of government.

You should still be able to save a decent chunk of money towards moving house if you are both earning.

@PensionAdvicePls yes, financial advisers are heavily regulated.
However, IME on the three occasions I've paid for financial advice and provided the extensive information required, on both occasions the adviser has not taken account of something significant that impacts on the final decision making. On one occasion it involved probate and actual financial errors which I spotted.
So it is by no means a guaranteed route to the best options.
FWIW OP I'd max on the pension for now, presumably you can still fund an ISA towards your future house move as well?

It's sad that you're so cynical. Not sure which part of my post sounded like I'm bragging...

@PensionAdvicePls I would recommend the meaningful money Facebook group for this kind of advice without some of the snarkier comments you will get from MN. https://www.facebook.com/share/g/1DcVDhf23J/?mibextid=wwXIfr

Thanks! And yes I'm already funding an ISA towards the house move

Thanks will check that out.

I don't recognise my IFA in the descriptions here. I don't use them for anything particularly complex, but they help manage my SIPP, and provide annual projections of where DH and I should be at retirement age. They take their commission out of the products they invest in rather than a direct charge, but they've been quite sensible with advice, and are more up to date with latest regulation that I am. DH and I are both very financially literate, but happy to accept professional help.Although no longer an issue (for now), they gave us advice for the future as it looked as though we might hit the lifetime allowance if our investments continued to grow at their previous rates.

By all means, run the numbers through a salary calculator to see your your marginal rates change according to different scenarios.

But what are they regulated to do?

thats what I’m asking, I don’t get it at all. Op is on PAYE. What can anyone advise to reduce tax that isn’t salary sacrifice or pension?

You need a tax advisor not an IFA. In my experience IFAs are interested mainly in making money out of you and whilst they know the rules around tax wrappers are not qualified in actual tax rules and regs.

In the first instance you need to look at salary sacrifice options and maximise your use of them. Then I think your only other option is pension.

would you find a tax advisor at an accountancy practice? Like a high street one?

Will you be able to put it all into a pension? Doesn’t the £60k limit include employer contributions and tax relief? I can’t see how you can put £43k in…?

They look at the bigger picture. The client doesn't always ask the right question.

they can only be regulated for certain activities. Looking at the bigger picture isn’t regulated. This is why I haven’t used them, no one can explain what they can do to help and I know they sell financial products. I don’t need any financial products

At your age and salary level I would strongly recommend getting professional planning advice not just on pensions but on you and your DH’s entire finances.

Its jealousy. I'm jealous. I work a 50 hour week in a job that is really important to help society function and as high as I can go without not using the skills I acquired over 5 years of training and 20 years in the field.
The amount you've been advised to put into your pension is the amount I earn per anum before tax.

It doesn't mean you don't have the right to ask. And nor should you. But its why your getting some of the replies.

It is also often because this time type of well paid is in something that doesn't really improve society in a positive way (though not always!)

Anyway, I hope you get some good advice

@Backedoffhackedoffyes, we use a small accountancy firm for tax advise. IFAs won’t touch it but it’s the most important bit imo!

To try to be a bit more helpful OP, pension is the obvious (as in most "efficient" and tax saving) answer. But you should also consider:

• whether you have any sort of accessible protection if you can't work (income protection or critical illness cover)
• whether moving house more quickly is important to you (pay more tax but have money more accessible via ISAs etc)
• whether saving for kids is important - too many people get caught out by Uni costs for example and you can put £9k a year each into ISAs for them which will cover those costs and mean they don't suffer the student loan issues
• whether you have enough life assurance for the worst case scenario

All those things may be/are important and the issue with putting the money in your pension is that you can't get it back out quickly. So one approach might be to put the money which is the "net of tax between £125 and £143" part into one or more of the above options to build a more rounded picture for yourself.

@MidnightPatrol please can you tell me what changes there are with pensions? I thought the only change is the increase in age from 55 to 57 from when you can withdraw it?