Pension carry forward

sebthered

I have had a company pension for the past 4 years and have unused allowance in all years.
I understand that to use carry forward I must first use my full allowance for this year 2016/17
So, current salary of £25k, this year I pay in £20k, and government adds £5k
Then I pay in £20k from unused allowance from 2013/14, and government adds £5k ?

I read that you can only use unused annual allowance once. Does this mean I can't repeat the process next year 2017/18 and use unused allowance from 2014/15..?

Any clarification would be much appreciated.

bigadaj

You are limited to 100% of relevant earnings, normally your salary.

sebthered

Now I understand, so this only is of benefit to those with current earnings/salary in excess of £40k

jamesd

Correct. .

sebthered

I spoke with the pension advisory service today, and they confirmed that my OP assumption was correct, and that as a basic rate tax payer I can pay in, before 5th April - current salary of £25k, this year I pay in £20k, and government adds £5k and then pay in my unused allowance for the previous three years totalling £60k and the government adds a further £15k .
so, I am able to make a personal contribution of £80k+ government contribution of £20k this year....?

ffacoffipawb

sebthered wrote: »

I spoke with the pension advisory service today, and they confirmed that my OP assumption was correct, and that as a basic rate tax payer I can pay in, before 5th April - current salary of £25k, this year I pay in £20k, and government adds £5k and then pay in my unused allowance for the previous three years totalling £60k and the government adds a further £15k .
so, I am able to make a personal contribution of £80k+ government contribution of £20k this year....?

No, you can only get tax relief on the maximum of your salary this year, so pay in £25k gross / £20k net.

If you pay in any more you wont be entitled to any tax relief on it, rendering such contributions pointless, or silly as they likely will be taxed on the way out.

xylophone

See

http://www.hl.co.uk/pensions/sipp/pension-carry-forward

"To qualify for carry forward, you must also:

Have had a pension in each of the years from which you are carrying forward, even if you haven't contributed to it (the State Pension doesn't count);
Have earnings of at least the amount you are contributing. For instance, to make a contribution of £100,000 and receive up to £45,000 tax relief you must have earnings of at least £100,000 this tax year.

There are other factors to consider if you or your employer have contributed to other pensions in addition to your SIPP or you have been a member of a final salary scheme - please download the Annual Allowance & Carry Forward Factsheet for details."

jamesd

You are restricted to £25k. I assume that either you didn't tell TPAS your salary or they missed it.

sebthered

Thanks for your responses folks, I emphasised to the chap @ TPAS my current salary, and armed with this information that was the advice he gave.
Just to confirm I have held a company pension for both this year and the 3 previous years I was basing my calculations upon, the exact figures (not that it appears to now matter) unused allowances
2013/14 £15,120.62
2014/15 £10,513.10
2015/16 £13,278.84
2016/17 £13,500 tbc

jamesd

You might want to contact TPAS again to let them know about the wrong answer so they can get that person a bit better informed.