Pensions tax planning for high earners
Mitigating a high tax bill
With continuing intense pressure on government finances, the October 2024 Budget confirmed that the overall tax burden in the UK will remain at an historically high level for years to come, with higher earners continuing to shoulder most of the burden. Higher and additional rate taxpayers currently pay over two thirds of all income tax.
One in five income tax payers is currently taxed at the higher or additional rate, up from one in seven four years ago, and the proportion will continue to increase because of frozen tax allowances and bands until April 2028. The threshold for paying additional rate tax reduced from tax year 2023/24 from £150,000 to £125,140, while income between £100,000 and £125,140 is effectively taxed at 60% (67.5% in Scotland) because of the tapered reduction to the personal allowance.
