The UK tax plan: salary sacrifice, SIPPs, ISAs and the £100,000 line, together

The Zenarios tax plan now works for UK households. It looks at your workplace pension, a SIPP, ISAs, investments, drawdown, the State Pension and the £100,000 and £60,000 lines together, tries combinations of changes on your own plan, and tells you what to change, by how much and when, and how much more you would have after tax, at today’s prices. It recommends the strongest plan it tested, never “the optimal” one. It is a planning estimate, not tax or financial advice.

Why UK tax decisions don’t stand alone

“Salary sacrifice or a SIPP?”, “ISA or pension?” and “When should I start drawing?” share the same money and the same limits. A pension contribution lowers adjusted net income, which decides the Personal Allowance above £100,000, Tax-Free Childcare and the Child Benefit charge. Every pension payment counts against one annual allowance. Money in an ISA is free of tax for good but gets no relief going in. And the years between stopping work and the State Pension are the cheapest time to take pension money out, but only if there is something else to live on.

The tax plan works inside your Zenarios plan, so all of this is already there: your pay, your pensions and ISAs, your children and childcare costs, the month you stop working and your State Pension age. Every combination it tries runs through the whole plan, month by month, rather than being estimated from a rule of thumb.

What it looks at

The UK pack has sixteen strategies, plus one piece of paperwork. Each has a short list of what it needs, what to weigh and the next practical step.

Checking your tax code appears as a to-do but is never ranked: a wrong code is put right later, so it changes when tax is paid, not how much.

The strategies, worked through

The figures below use 2026-27 rules for England, Wales and Northern Ireland and round numbers. Your own plan uses your nation’s bands, your income in each year and the rules of each year, so its amounts will differ.

Salary sacrifice, and the 2029 NI cap

On a £50,000 salary, sacrificing £5,000 into the workplace pension saves £1,000 of income tax at 20% and £400 of National Insurance at 8%, so £5,000 reaches the pension for £3,600 of take-home pay. Where the employer passes on part of its own 15% NI saving, that goes in too. From 6 April 2029, only the first £2,000 a year sacrificed stays free of NI: the same £5,000 then saves £160 of NI instead of £400. The tax plan counts the cap from the year it applies, and tries the sacrifice at the same take-home cost as every other option.

SIPP with relief at source

You pay £800 into a SIPP and the provider claims £200 from HMRC, so £1,000 is invested. A higher-rate taxpayer claims a further £200 through Self Assessment, and that arrives only with the settlement on 31 January after the tax year. The tax plan pays for the gap in between from your plan’s money, so the first year costs more than later ones. Contributions stay within the £60,000 annual allowance (tapered for very high incomes, reduced to £10,000 once you have flexibly accessed a pension), plus carry forward from the three years before when you confirm it.

The £100,000 line and the childcare cliff

Between £100,000 and £125,140 of adjusted net income, the Personal Allowance falls by £1 for every £2, so each £1,000 of that income costs £600 in income tax: an effective rate of 60%. Above £100,000 the family also loses Tax-Free Childcare, worth up to £2,000 a child a year.

On £110,000 with two children in paid childcare, a £10,000 salary sacrifice brings adjusted net income to £100,000. It saves £6,000 of income tax and £200 of NI, and keeps up to £4,000 of Tax-Free Childcare: £10,000 reaches the pension for £3,800 of take-home pay, and the childcare support stays. With a SIPP instead, the same line is reached with relief at source and the rest through Self Assessment. The tax plan sizes the contribution exactly to the line; with children, it also tries £60,000, where the High Income Child Benefit Charge starts. A pay rise moves the line, so the plan uses the income you have now.

Bed and ISA, and the CGT exempt amount

£60,000 in a general investment account pays tax on its dividends and, when sold, on its gains at 18% or 24% above the £3,000 exempt amount. Bed and ISA sells it and buys it back inside the ISA, a twelfth of the £20,000 allowance a month, until the account is empty. Each sale realises its gain, so the plan spreads it over tax years to use the exempt amount each time. Where the ISA is already full, the exempt amount can still be used each March by selling and buying back; buying the same fund back within 30 days keeps the old cost, so the rebuy happens in the ISA, the partner’s account or a similar fund.

Drawdown before State Pension age

Someone who stops work at 60 with a State Pension from 67 has seven years with little taxable income. Each March the tax plan can draw £16,760 from the pension: a quarter tax-free, the rest within the £12,570 Personal Allowance, so no tax at all. Over seven years that is £117,320 moved out of the pension into the ISA, where it stays tax-free, instead of being drawn later on top of the State Pension at 20%. It also compares taking the tax-free quarter up front with taking it as part of each payment.

Voluntary Class 3 National Insurance

The full new State Pension, £241.30 a week in 2026-27, needs 35 qualifying years; with fewer, you get 1/35 for each year, from at least ten. A missing year bought with Class 3 contributions costs £18.40 a week, £956.80 for the year, and adds about £358 a year to the State Pension for life. It pays back in under three years of drawing it. The tax plan only buys gaps your NI record says can still be filled, usually from the last six years: check your forecast before paying.

Marriage Allowance and moving savings

When one partner earns less than the Personal Allowance and the other is a basic-rate taxpayer, £1,260 of allowance can move across, saving up to £252 a year. A claim can also be backdated four tax years, which the tax plan mentions but does not count. Married couples and civil partners can also move savings and investments to the partner with the lower tax: transfers between them carry no gain and no loss, so both exempt amounts, both savings and dividend allowances and the lower bands can be used.

How it works, step by step

Open it from the Scenarios tab under Taxes, from the tax details of your plan, or by asking “How can I pay less tax?”. It has five steps, the same as for German and US plans.

1. Review. This tax year’s income tax, National Insurance and tax on savings, dividends and gains, the refund or bill to expect on 31 January, which strategies may apply and which need a fact first.
2. Questions. Only the facts those strategies need: whether your employer offers salary sacrifice and passes on its NI saving, your National Insurance record and the years you can still buy, the cost of your investments, whether you are married. If you don’t know, leave it: the strategy then shows as something to check first, with no amount.
3. Boundaries. The money a month it may use, a one-off amount from savings above your cushion, the cushion to keep, goals that must not come later, the decisions it may change and the most changes you want. Deferring the State Pension is tried only if you allow claim-age changes here.
4. Plan. Each strategy is tried on its own, the strongest are combined, their amounts are fine-tuned, and the result is checked in full and against harsher assumptions. It runs on your device, shows its progress and can be cancelled.
5. Follow through. Save the result as a scenario or adopt it, with Undo. The checklist carries the UK deadlines: 5 April for ISA, pension and allowance decisions and CGT, 31 January for Self Assessment. The whole plan can be exported as a PDF.

How it compares plans

Plans are compared by what you would have after tax at the end of the plan, through the younger adult’s 95th year, if everything were cashed in, at today’s prices. Unrealised gains count after their CGT, ISAs in full, and pensions after the tax on paying them out, with the tax-free quarter.

Every pension option for a person is tried at the same cost to you each month. Salary sacrifice is sized so that your take-home pay drops by that amount; a SIPP contribution so that it costs that amount after relief at source and the higher-rate relief that follows. Every contract that gains is then held against its twin: the same net money each month in an index fund in a general investment account, from the same month. It wins only by what the pension or ISA adds through tax. All pension payments of a person share one annual allowance.

A change is suggested only when its tax part, the gain beyond simply investing the money, is at least £5,000 for something you open or sign (a SIPP, an ISA, a Lifetime ISA) or £1,000 when it takes only a form or a request to your employer, and when it still helps with returns one point lower and fees half a point higher. Otherwise the tax plan tells you your plan is already in good shape, or that the result is too close to call, and keeps it as it is. The search caps how many projections it runs and uses no randomness, so the same plan gives the same answer.

The UK tax rules underneath

A tax plan is only as good as the projection it runs on. UK plans in Zenarios model:

• Income in its statutory order: earnings and pensions, then savings, then dividends, with the starting rate for savings, the Personal Savings Allowance and the £500 dividend allowance; Scottish bands for earned income, UK bands for savings and dividends.
• Adjusted net income for the Personal Allowance taper, the High Income Child Benefit Charge and Tax-Free Childcare; the Marriage Allowance; Gift Aid.
• Capital Gains Tax on the basic band left after income, at 18% and 24%, with the £3,000 exempt amount and losses carried forward; property gains with Private Residence Relief.
• Pension contributions by salary sacrifice (with the 2029 NI cap), net pay or relief at source; the annual allowance with taper, carry forward and the money purchase annual allowance; the tax-free quarter within the Lump Sum Allowance; the minimum pension age rising to 57 in April 2028.
• The State Pension from your qualifying years, uprated by the triple lock, with deferral and Class 3 years; student loan repayments for Plans 1, 2, 4 and 5 and postgraduate loans, written off on schedule.
• ISAs and Lifetime ISAs with the bonus and the first-home withdrawal; rental income with the landlord interest restriction and the £1,000 property allowance.
• Each tax year settled on 31 January after it ends, as a refund or bill, so higher-rate relief and a mid-year retirement show up when they would.

What it doesn’t do

The UK tax plan works for plans in pounds with calculated UK taxes. It does not yet test claiming Child Benefit for National Insurance credits, paying a severance or bonus into the pension, the timing of a property sale or overpaying a mortgage. State Pension deferral is not yet checked against an early death, so it is off unless you allow it. Funded childcare hours, payments on account, the cash ISA limit announced for April 2027 and the 12-month rule before a Lifetime ISA home purchase are not modelled. New UK plans start with the full new State Pension; enter your forecast if yours differs.

It leaves out inheritance tax, including pensions in the estate from April 2027, business structures, non-dom rules and cross-border cases. It does not choose your retirement date, and it does not file your return, open an account or move money.

The UK figures were checked against GOV.UK and HMRC in October 2026. The result is what the numbers suggest under the plan’s assumptions, not tax or financial advice: check the details with a chartered tax adviser or a regulated financial adviser before you act, especially for pensions. The methodology describes the tax models, and the feature reference keeps the current scope. The German and US tax plans work the same way with their own strategies.

Sources for the rules quoted here: salary sacrifice , pension tax relief, pension allowances, income over £100,000, Tax-Free Childcare, ISAs, CGT allowances, voluntary NI, Marriage Allowance. Figures for 2026-27.

The tax plan is part of Zenarios for every UK plan, with no extra setup. Try it in the web app, which is free and needs no account.

Common questions

Can Zenarios help me stay under £100,000?

Yes. For UK plans with calculated taxes, the tax plan sizes salary sacrifice or SIPP contributions to bring adjusted net income to £100,000, keeping the Personal Allowance and Tax-Free Childcare, or, with children, to £60,000 for the Child Benefit charge. It compares that with the other options at the same take-home cost. It is a planning estimate, not tax or financial advice.

Does it include the 2029 salary sacrifice NI cap?

Yes. From 6 April 2029 only the first £2,000 a year of salary sacrifice stays free of National Insurance, and the tax plan counts that from the year it applies.

What does the UK tax plan not cover yet?

Claiming Child Benefit for NI credits, paying a severance or bonus into the pension, the timing of a property sale and mortgage overpayments. State Pension deferral is tried only if you allow it, because it is not yet tested against an early death. Inheritance tax, including pensions from April 2027, is outside the model.

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A Zenarios guide. These guides explain planning concepts and the product; they are not a personalized financial recommendation. Illustrative calculations are not results from your plan.