Pension contribution and threshold

[FiremanT]

If one has an annual wage of £39000 PLUS a pension of £1500 pa, a total of £54K, thhis would just creep into Higher Tax rate. If one then pays pension contributions, this will bring the taxable amount to sub HRT.

The question is: When considering the Savings allowance, a I correct to assume that the relevant figure is the post pension contribution taxable income? ie provising a £1000 Savings allowance?

Thanks

[FiremanT]

If one has an annual wage of £39000 PLUS a pension of £15000 pa, a total of £54K, thhis would just creep into Higher Tax rate. If one then pays pension contributions, this will bring the taxable amount to sub HRT.

The question is: When considering the Savings allowance, a I correct to assume that the relevant figure is the post pension contribution taxable income? ie provising a £1000 Savings allowance?

Thanks

[D&C]

Only certain methods of making pension contributions will reduce your taxable income.

A lot of pension contributions are made using the relief at source method. These do not have any impact on your taxable income.

But they do increase your basic rate band so can be beneficial, just not in the way you think.

You have to add all taxable income, including ALL taxable interest when determining the amount of savings nil rate band due (0/500/1000).