@magicmoneytips: Getting a pay rise is fantastic news, but did you know it could have tax consequences that many people never consider? Before you celebrate that bigger salary, it’s worth understanding how moving into a higher tax bracket could affect more than just the tax you pay. As your income increases, you could move from the basic rate of tax into the higher rate, or from the higher rate into the additional rate. That doesn’t just mean paying more income tax on part of your earnings. It can also reduce or remove valuable tax allowances. For example, your Personal Savings Allowance may reduce. Basic-rate taxpayers can currently receive more savings interest tax-free than higher-rate taxpayers, and additional-rate taxpayers do not receive a Personal Savings Allowance. A pay rise could therefore mean paying tax on more of your savings interest. The good news is there are ways to improve your tax efficiency. If your employer offers salary sacrifice, exchanging part of your salary for an increased pension contribution may help reduce your taxable income while boosting your retirement savings. It’s also worth making sure you’re making full use of available tax allowances, including your annual Cash ISA allowance, where eligible interest can be received free from UK income tax. Every person’s financial situation is different, so what works for one individual may not be right for another. Before making decisions about salary sacrifice, pensions or tax planning, it’s important to take regulated financial advice to ensure any strategy is suitable for your circumstances. Understanding how a pay rise affects your overall finances can help you keep more of what you earn and avoid unexpected tax surprises. A little planning today could make a significant difference to your long-term financial future. #PayRise #TaxPlanning #FinancialEducation #MoneyTipsUK #PersonalFinance

MagicMoneyTips | Kevin White

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Saturday 18 July 2026 05:41:20 GMT