My other half and roll forward rules

fcandmp

I hope someone here might be able to quickly resolve a query I have about roll forward options for my other half's pension. From November 2008 to February 2014 she worked for the NHS and was part of the NHS pension scheme. She left work to become a carer and was not part of a registered pension scheme during 2014/15, but commenced a stakeholder pension as a non taxpayer in June 2015 and has contributed the max of £2880 in this tax year.

Is there any roll forward opportunity for years 2012/13 or 2014/15 when she didn't contribute the maximum she could whilst a member of the NHS scheme?

Many thanks

jem16

fcandmp wrote: »

Is there any roll forward opportunity for years 2012/13 or 2014/15 when she didn't contribute the maximum she could whilst a member of the NHS scheme?

Many thanks

Carry Forward requires you to at least be a member of a pension scheme during the years you want to use Carry Forward so no would be the answer.

Carry Forward only allows you to contribute more than the Annual Allowance of £40k. Tax relief is limited to 100% of your earnings in the tax year the contribution was made so as a non-taxpayer she can't make use of Carry Forward anyway.

jamesd

fcandmp wrote: »

From November 2008 to February 2014 she worked for the NHS and was part of the NHS pension scheme. She left work to become a carer and was not part of a registered pension scheme during 2014/15, but commenced a stakeholder pension as a non taxpayer in June 2015 and has contributed the max of £2880 in this tax year.

Is there any roll forward opportunity for years 2012/13 or 2014/15 when she didn't contribute the maximum she could whilst a member of the NHS scheme?

To be eligible to use carry forward the requirement is not paying in to a pensions scheme, it's simply being a member of one at any point during that tax year. She was presumably a deferred member of the NHS scheme and hence eligible to carry forward for that period.

The only really practical way for her not to have been a member would have been to use the serious ill health system - projected death within a year - to withdraw all of the pension money after transferring it out of the NHS scheme. Or if over 55 to have used Flexible Drawdown rather than Capped Drawdown.

jamesd

fcandmp wrote: »

non taxpayer in June 2015 and has contributed the max of £2880 in this tax year. ... Is there any roll forward opportunity for years 2012/13 or 2014/15 when she didn't contribute the maximum she could whilst a member of the NHS scheme?

While carry forward is allowed, that doesn't do her any good.

The base limit is earned income in the tax year in which the pension contributions are made or £3,600 gross if that is more. If someone has more than £40,000 of earned income they can use carry forward to allow them to pay in more than the annual allowance this year of £40,000.

What you can't do with carry forward is use it to pay in more than your earned income in the tax year in which you make the contribution, or more than that £3,600 alternative gross amount.

The only way for her to pay in more than that net £2,880 is to have more than that in earned income in the tax year.

fcandmp

Thanks for replying. Sorry if I wasn't clear.

My OH worked in the tax years 12/13 and 13/14 and earned approximately £5,500 each of those years and will have contributed the basic contribution according to the nhs scheme. So, what I am trying to find out is whether we could now top up via the roll forward rules into her stakeholder pension that she commenced this June. You are correct that she is now a deferred member of the nhs scheme and as far as I understand couldn't top up via that scheme even if the roll forward rules provided an opportunity. Many thanks

jem16

fcandmp wrote: »

So, what I am trying to find out is whether we could now top up via the roll forward rules into her stakeholder pension that she commenced this June.

As we have already said the answer is no. For tax relief purposes it only matters what is earned in the tax year the contribution is made.

What is she earning this year? That will be her maximum for tax relief and she cannot use previous years to gain extra tax relief.

The sole purpose of Carry Forward is to allow people to contribute more than the maximum £40k allowance but this will only work if you also earn more than £40k this tax year.

fcandmp

Ok thanks for your patience, I think I understand the rules more clearly now.