Pension Tax Relief Calculator

Psst. D'ya wanna double your money? Ok, how about tripling it? Triple and a half?! Final offer!

Sounds too good to be true right? Well depending on your tax band and your employer contribution to your pension scheme this is effectively what is on offer.

Access the spreadsheet here:
https://docs.google.com/spreadsheets/d/1UXYHzVNM2wrynmsJzAIcr9rlQcHShAgWSLy7cS6I3wU/edit?usp=sharing

As with all my spreadsheets, you only need to fill out the cells in bright yellow. In the case of this one, there are only 3 cells to fill in.

Example 1:

• Take the UK median wage of roughly £25k (mean wage is much higher due to sky high wages skewing it!)
• Employer contribution of 5%
• Employee contribution of 6%
• If done via salary sacrifice, then the benefit to the employee is 224%
• If they have a student loan then this rises to 273%

Example 2:

• Income of £60k
• Employer and Employer contribution same as above (5% and 6% respectively)
• If done via salary sacrifice, then the benefit to the employee is 279%
• If they have a student loan then this skyrockets to 349%!!
• These figures apply to any income above the higher rate tax band starting point, currently 50k.
• Sticking with this example, this employee could sacrifice 10k into their pension and instantly get 349% return! 

All of these returns are instant, and the performance of your pension after that point is a bonus. Remember the magical effect that 20/30 years of compounding will have on it as well!

Anyway, this post might not last that long depending on what the Conservatives do to the Pension Tax Relief in a few weeks, we shall see!