Is it worth it (or possible) for me to increase my workplace pension contributions, which are taken via salary sacrifice, to offset this increase and remain under the higher tax rate threshold?

I currently earn just below the higher rate tax threshold. I am getting a pay rise (yay) that will then put me just over the threshold. Is it worth it (or possible) for me to increase my workplace pension contributions, which are taken via salary sacrifice, to offset this increase and remain under the threshold? Just so I can retain the higher PSA and lower dividend tax rate and similar things.

Hi Simon,

I hope you are well.

Would the pension contributions also increase in line with your payrise? If so and if at the appropriate amount, would that then see you below the higher rate threshold? Purely from a tax planning point of view this could be worthwhile.

However, I feel the most important question is, how would this benefit your broader longer-term financial plans? This should the main reason for any action, as this would help ensure your money is working hardest for your goals.

Hope this helps?