Finding out Pension input amount

1971graeme

I am planning to start a SIPP for 2014-15 financial year and am having trouble finding out my pension input amount. I pay into a Royal Mail pension and from previous pension statements the amount is on it but this year i have worked all full time with previous years working part time. Phoned up the pensions helpline twice and been told there is no way they can find it out for this year. I know the year is not over yet but pension input period is 1st April till 31st March which leaves days if i want to get it done in this financial year. Is the pension input amount a hard figure to work out for employees. I could try a educational guess from previous statements but would prefer a correct figure.

AlanP_2

I'm not sure that you can work it out as an employee and my employer (local gov) provides the information with the annual statement around November.

As for starting a 2014/14 SIPP:

1) Do you mean a SIPP which can invest in all sorts of non-traditional asset types or a Personal Pension? PP charges are generally lower than SIPP charges.

2) You are allowed to contribute up to your earned income level up the the annual limit of £40k BUT you can carry forward unused allowance from previous 3 years when it was £50k per year. Your previous statements should tell you how much c/f you have from those years.

So unless you are planning to pay a very large amount in I suspect you will be OK.

Triumph13

Assuming it's a defined benefit pension there is no way they can work out the number accurately until after the end of the tax year. Your input amount is 16x the increase in your pension entitlement at retirement, but this increase is calculated by taking your entitlement at the start of the year, uplifting it for CPI inflation and deducting it from the entitlement at the end of the year. As the inflation rates don't get published until the middle of the following month you can't calculate exactly in the time available.


The answer is to estimate it roughly and make sure you don't go over by more than the amount of carry forward you have available from the previous 3 years.

1971graeme

Just checked some stuff and last year my pay was 20k approx and pension input amount was 5k approx so this year my pay should be about 23k so with the carry forward rules I can pay 23k into a SIPP and get tax relief as i have 15k to carry forward from previous year and i can pay up to my annual salary into a SIPP?

1971graeme

Amount I pay will be say £19k to get up to £22.8k. Part of reason for doing this is I think i'll be a higher rate tax payer this year so reduce my tax bill.

Triumph13

Sorry, from the way you phrased your question I thought you were talking about annual allowance (which you can carry forward) vs 100% of earnings (which you can't carry forward).


The pension input figure which is dependent on CPI is only relevant for the annual allowance test and you are going to be well under that.


The figure you want is your gross earnings for the tax year less your employee pension contributions for the tax year. Your latest payslip should show those figures up to January so you just need to add on the expected numbers for Feb and March. How easy that will be will depend on whether you get paid overtime or not!