Calculating unused SIPP allowance

caldi9

Hey,

I have used this link to calculate my unused SIPP allowance, but there are 2 outstanding questions.

http://www.hl.co.uk/pensions/interactive-calculators/carry-forward-annual-allowance-calculator

1. Since when and for what tax year is the £10,000 cap in place?

2. Does gross pension equal the amount that one can contribute? Eg, £40k gross pension means that is the amount I can still put into my SIPP or are there other adjustments?

Thank you

xylophone

Since when and for what tax year is the £10,000 cap in place?

Do you mean the Money Purchase Annual Allowance?

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The Money Purchase Annual Allowance was introduced on 6th April 2015 and was set at £10,000 gross p.a. The government has now reduced the MPAA to £4,000 gross p.a. which applies to contributions made from 6th April 2017.

See FAQ here under I have already accessed my pension

http://www.hl.co.uk/pensions/sipp/how-much-can-i-invest

caldi9

Thanks -

Does gross pension equal the amount that one can contribute? Eg, £40k gross pension means that is the amount I can still put into my SIPP or are there other adjustments?

MallyGirl

You cannot contribute more than you earn. If you earn £30k then that would be the limit you could contribute

Linton

caldi9 wrote: »

Thanks -

Does gross pension equal the amount that one can contribute? Eg, £40k gross pension means that is the amount I can still put into my SIPP or are there other adjustments?

The £40K includes all contributions (at gross values) both by yourself and your employer to any of your pensions. Unused allowance can be carried forward.

The amount you put into your SIPP from taxed income is 80% of the gross contribution. The other 20% is refunded basic rate tax paid in by HMRC. So if you had no other pension contributions the £40K limit would correspond to a £32K contribution directly from yourself.

The earnings limit also refers to gross, you would pay in the net equivalent.