Pension on a £42,000 salary — the basic-rate sweet spot.

£42,000 puts you firmly in upper-basic-rate territory — a comfortable salary still £8,270 below the higher rate threshold. The interesting opportunity at this band is that you have meaningful disposable income but haven't yet hit higher-rate tax. Increasing your pension contribution to 15% (£6,300/year) costs you only around £5,040 after basic rate relief, and at £42k that's still less than 12% of take-home. Over 30 years of contributions that produces a pot of around £440,000 at 5% net growth — comfortably exceeding the threshold for a moderate retirement once combined with the state pension. If your employer offers salary sacrifice, the effective cost drops further because of NI savings. The £8,270 gap to higher rate also means a single bonus or pay rise could push you into higher rate, where pension contributions become even more tax-efficient.