Pension Carry Back

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
14 replies 1.1K views
Unbelievable_2Unbelievable_2 Forumite
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In the 03/04 tax year my husband left his job. He contributed to the occupational pension scheme but had been there less than a year so transferred a lump sum into a stakeholder. He then didn't work for a while and then was self-employed until the end of the tax year.

Does anyone know if he can make further payments to the stakeholder and have them treated as last year's contributions? (He's on the 20% of NRE scale). ???
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Replies

  • isasmurfisasmurf Forumite
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    You can elect to carry back contributions made to the previous year at the time the contribution is being made. To do this you will need Form PP43 and give it to your Stakeholder Pension manager. This is all you need to do unless you are a higher rate taxpayer in which case you will need to also declare it on your SA return to reclaim the higher rate relief. You can only carry back contributions to the previous year before 31st January

    I assume he has contributed up to his limit this year?
  • Thanks saver smurf.

    Yes all up to date with this year. We just weren't sure what his max contribution to a stakeholder would be for the last year because he was, for a time, contributing to an occupational scheme and earned more than 30,000. ???
  • Debt_Free_ChickDebt_Free_Chick Forumite
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    Thanks saver smurf.

    Yes all up to date with this year. We just weren't sure what his max contribution to a stakeholder would be for the last year because he was, for a time, contributing to an occupational scheme and earned more than 30,000. ???

    The earnings he received for that part of the year have been covered, so you cannot use them for a contribution to a stakeholder pension.

    You need to look at the rest of his earnings for that tax year and use them for a stakeholder pension.

    Does this help? If not, post back :)
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Thanks DFC.

    He only earned about £8K from self employment up to April 5th. Do you think he can make any contributions in respect of that year? ???
  • MilarkyMilarky Forumite
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    The earnings he received for that part of the year have been covered, so you cannot use them for a contribution to a stakeholder pension.

    You need to look at the rest of his earnings for that tax year and use them for a stakeholder pension.

    Does this help? If not, post back  :)

    So he may contribute £3600 to a stakeholder for that year by default - or a higher figure based on a percentage of his earnings and age in that year if applicable?

    If his earnings are already attributable to his membership of the employer's scheme, are you saying he should have contributed up to that scheme's limit whilst still there, but after leaving can only rely on any 'non pensionable' income elsewhere for that tax year and that if the percentage from this subsequent income in the same tax year [03/04] will not result in an amount greater than £3600 then that's his limit as far a a stakeholder contribution for 03/04 is concerned?

    [Sorry, I'm just being nosey ;) ]
    .....under construction....
  • MilarkyMilarky Forumite
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    Unbelievable, how old is your husband? [it determines the age-related percentage limit of earnings - upto 35 it's 17.5%, above 36 it's 20%]

    I'd jump to the conclusion that he can only pay upto £3600 into a stakeholder for that year based on £8K, but could be wrong, of course!
    .....under construction....
  • Milarky

    He can do 20% of NRE.
  • Debt_Free_ChickDebt_Free_Chick Forumite
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    So he may contribute £3600 to a stakeholder for that year by default - or a higher figure based on a percentage of his earnings and age in that year if applicable?

    It's actually a higher figure based on a percentage of his Net Relevant Earnings (NRE). The definition of NRE excludes earnings already pensioned in an occupational pension scheme - but if he had received a refund of those contributions, then the earnings could have been reinstated back into the total of NRE (with me so far?)

    If his earnings are already attributable to his membership of the employer's scheme, are you saying he should have contributed up to that scheme's limit whilst still there, but after leaving can only rely on any 'non pensionable' income elsewhere for that tax year and that if the percentage from this subsequent income in the same tax year [03/04] will not result in an amount greater than £3600 then that's his limit as far a a stakeholder contribution for 03/04 is concerned?

    [Sorry, I'm just being nosey  ;) ]
    [/quote]

    In a nutshell yes - or he could have opted to have had his contributions to the occupational scheme refunded to him. Then, all his earnings for that year could have been included in his NRE and he could have contributed up to 20% to a Stakeholder for that year.

    Easy, innit ;)
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Debt_Free_ChickDebt_Free_Chick Forumite
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    Unbelievable, how old is your husband? [it determines the age-related percentage limit of earnings - upto 35 it's 17.5%, above 36 it's 20%]

    I'd jump to the conclusion that he can only pay upto £3600 into a stakeholder for that year based on £8K, but could be wrong, of course!

    Correct. Or it could have been 20% of NRE, had NRE been higher than £18,000

    HTH
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Debt_Free_ChickDebt_Free_Chick Forumite
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    Milarky

    He can do 20% of NRE.

    20% of £8,000 only provides £1,600 so I think he can pay the "de-minimis" limit of £3,600

    HTH
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
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