Using carry forward

jardov

I am trying to maximise my pension contributions this year and likely to go over the annual allowance. I do however have unused allowance from the previous 3 years - question is do I need to notify HMRC that I am using the unused allowance from previous years or do they determine that for themselves?

And if I do need to notify them, how exactly do I do that?

thanks

Jard

zagfles

No you don't need to notify them, just keep records in case they query it.

Note that you are still constrained by the 100% of earnings limit which can't be carried forwards.

jardov

Thanks for the reply, yep I'm aware of the earnings limit and fall within that.

dunstonh

No need to notify HMRC as pensions are recorded under your NI number and they can soon find out if a) your income this year is sufficient to pay the full contribution and b) how much income you had over the 3 previous years.

They just ask you to maintain records.

Bravepants

Interesting thread! I too am thinking of making additional contributions by lump sum to a DB pension as I approach retirement (5 years away at least). I want to make the additional contributions as close to retirement as I can.


I buy monthly added pension at the moment anyway. I read that the annual allowance is calculated as something like 16 times (off the top of my head) the annual accrual rate, which obviously is based on mine and my company's contribution. So if I accrue £1000 per year of DB pension then that's £16000 towards annual limit.


I also buy Added Pension...but do I add up my monthly contributions and subtract those from the annual allowance, OR do I once again multiply the accrued annual added pension by 16? It's not clear from the documentation I've so far read.

zagfles

Bravepants wrote: »

Interesting thread! I too am thinking of making additional contributions by lump sum to a DB pension as I approach retirement (5 years away at least). I want to make the additional contributions as close to retirement as I can.


I buy monthly added pension at the moment anyway. I read that the annual allowance is calculated as something like 16 times (off the top of my head) the annual accrual rate, which obviously is based on mine and my company's contribution. So if I accrue £1000 per year of DB pension then that's £16000 towards annual limit.


I also buy Added Pension...but do I add up my monthly contributions and subtract those from the annual allowance, OR do I once again multiply the accrued annual added pension by 16? It's not clear from the documentation I've so far read.

It depends whether the added pension is DB or DC. If it's DB, it's the same as the rest ie 16x, if it's DC then it's the amount that goes in.

Bravepants

zagfles wrote: »

It depends whether the added pension is DB or DC. If it's DB, it's the same as the rest ie 16x, if it's DC then it's the amount that goes in.

Great! Thanks for that!