Carrying forward annual pension allowance

n-n

Hi all,

Anyone know the answer to this one? It's about carrying forward unused pension contribution allowances.

I last had an employer pension in 2006/2007. I started at a new employer in 2014/2015, where I get employer contributions. In the intervening tax years, I didn't have a company pension or make any personal contributions.

I'd like to "catch up" with some additional contributions from savings I was putting by in lieu of a pension, probably going over the £40,000 allowed for 2014/15. My income may be lumpy, so I'd like to take advantage of this year where I'm well into the higher rate band.

It looks like you can roll forward 3 years of unused allowances, providing you were a member of a registered scheme in those years..

So, finally, getting to the question: I still have the pension from the 2006/07 employer, does that mean I was a member of a pension scheme for the years 2007-2013? I believe the guidance says you only have to be a member, not an active member, to carry forward.

thenudeone

The maximum "allowance" of £40k can be exceeded by using up any unused £40k "allowances" from the previous three pension scheme years.

I don't recall any restriction based on whether you were a member or contributor to any scheme in any of those years.

BUT the total you contribute must still be within the current tax year's income. The carry forward of £40k allowance does not allow you to contribute [and gain tax relief] on more than your income.

[The allowance used to be £50k but was changed in the current tax year]

So (assuming you haven't exceeded the £1.xm maximum pension pot size), the maximum you can contribute to a pension and get tax relief is:
the LOWER of
1) your income this year
and
2) £190k (50+50+50+40) less your contributions made in the previous three pension years
https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief
https://www.gov.uk/tax-on-your-private-pension/annual-allowance

There is also an unused allowance calculator on the second link, which may help.

jem16

thenudeone wrote: »

The maximum "allowance" of £40k can be exceeded by using up any unused £40k "allowances" from the previous three pension scheme years.

I don't recall any restriction based on whether you were a member or contributor to any scheme in any of those years.

There is such a restriction. You must be a member of a recognised pension scheme during the years you wish to use the carry forward allowance.

From http://www.hmrc.gov.uk/tools/pension-allowance/

Carrying forward unused annual allowance
You can use these calculators to work out whether you have any unused annual allowance that you can carry forward to a current tax year provided you were a member of a registered pension scheme, or qualifying overseas pension scheme, at some time during all of the previous 3 tax years.

jem16

n-n wrote: »

So, finally, getting to the question: I still have the pension from the 2006/07 employer, does that mean I was a member of a pension scheme for the years 2007-2013? I believe the guidance says you only have to be a member, not an active member, to carry forward.

Yes you only have to have been a member, you don't actually have to have made a contribution.

From the same HMRC link as my previous post.

You must have been a member of a UK registered pension scheme, or qualifying overseas pension scheme in every year in order to be able to use this calculator. You don't need to have a pension input amount for every year.

n-n

Thanks everyone, I think that answers my question