The recent announcements from major US banks, including Bank of America and JPMorgan Chase, revealed a total profit of $142 billion for 2024, marking a 20% increase year-on-year. This profit surge is attributed to increased global deal making, which boosts the earnings of not just banks but also affiliated professionals such as lawyers and accountants. Despite the high profits, UK taxpayers will feel the pinch as freezing tax thresholds will see a larger share of bonuses go to taxes. Investment strategies, particularly utilizing pensions, can mitigate tax burdens for higher earners.
High finance is famous for its bumper bonuses. But in the UK, more and more of the City's bonus bonanza is likely to end up in the hands of the taxman.
Investing a £100,000 bonus into a pension allows you to save income tax (45 percent) and National Insurance, maximizing your post-tax earnings.
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