Methodology

The trap

Once your income passes £100,000, HMRC removes £1 of your tax-free personal allowance for every £2 you earn. By £125,140 the whole allowance is gone. Across that band, part of your income is taxed at roughly 60% — far more than the headline higher rate. This tool calculates how a pension contribution restores the allowance and lowers that rate.

What we calculate

From your income, we work out how much of it falls in the trap, the contribution needed to bring your adjusted net income back to £100,000, the tax relief that contribution earns, its real cost after relief, and the effect on your take-home pay and projected pot.

The figures we use

• Personal allowance: £12,570, tapered between £100,000 and £125,140.
• Basic-rate band: £37,700.
• Higher-rate threshold: £50,270. Additional rate: above £125,140.
• Pension annual allowance: £60,000, which caps the contribution the tool models.

These are 2026/27 rates for England and Wales. Thresholds are frozen until at least April 2028.

What we assume

We assume your income is employment salary or self-employment profit, both of which count as relevant UK earnings for pension tax relief. We round income to the nearest £1,000. Projections of your pot are illustrative and assume no investment growth beyond what you enter.

What we don't cover yet

We don't yet model company directors who take income as dividends from a company they own. The rules for that are different: personal pension relief is capped at your salary, not your total income, and the escape usually has to come from a company contribution. We screen those cases out rather than show a figure we can't stand behind. Scottish income tax bands are not covered.

This isn't financial advice

HiddenWay is an information tool, not a financial adviser. The figures are estimates to help you understand your position, not a recommendation to act. Pension and tax decisions depend on your full circumstances. Speak to a qualified adviser or accountant before making a contribution.

Questions

If something here looks wrong, tell us: hiddenwayapp@gmail.com. Getting the numbers right is the point.