Income tax is calculated on pension withdrawals at the following rates:
| Band | Taxable income | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £150,000 | 40% |
| Additional rate | over £150,000 | 45% |
You can find more information on income tax rates and personal allowances on the GOV.UK website. Scottish tax bands are yet to be implemented but are coming very soon!
Pension contributions can be made weekly or monthly and added as percentages or amounts. If you don't know your contribution amounts check with your employer's payroll department. Currently the site only supports salary sacrifice pension schemes however we are planning on adding different pension types in the near future.
Salary sacrifice pension schemes have a limit of £40,000, the website will allow you to contribute more but doesn't calculate any potential tax you might be liable for.
This feature is useful if you receive a yearly bonus or similar. Additionally, if you want to use part of your tax free lump sum to pay down your mortgage then this feature is ideal for that.
Another use for this feature is for if you sell a property and want to invest the proceeds or save it as cash.
We do not calculate Capital Gains Tax therefore you must do your own calculations. CGT is payable on profits from investments and property. You don't pay CGT on private pensions or ISAs.