How their tax bills soar

WORKERS can save £40,000 into a pension every year tax-free but a rule introduced in 016 means this allowance can start to shrink the moment you earn a penny over £110,000.

If your taxable income and pension savings combined rise above £150,000, a taper gradually reduces your £40,000 tax-free allowance down to £10,000 at a rate of £1 for every £ you go above the threshold.

But for those in defined benefit schemes like the NHS’s, the growth in the total value of your pension across retirement is counted. NHS Pensions calculates this by multiplying any rise in predicted annual pension income by at least 16, leading to huge tax bills for top earners.