Using my unused pension allowance

Chrism03

I understand that you can pay in up to 100% of your wage into a SIPP (max £40K per year) and the allowance can be backdated a number of years (3?).

Now I am no where near that for the past 3 years but I would like to use most, if not all, of my allowance.

To find out what I can put into my SIPP is it a question of trawling though my pay slips and added up my pension contributions or is there another way of finding out?

zagfles

Chrism03 wrote: »

I understand that you can pay in up to 100% of your wage into a SIPP (max £40K per year) and the allowance can be backdated a number of years (3?).

Nope, you've understood wrong. You've probably read some oversimplified rubbish which tries to combine two separate unrelated limits which have different rules. Your earnings in previous years are completely irrelavent, unless you were on a very high income (six figures) and affected by the AA taper.

Assuming you're not a very high earner, and haven't flexibly accessed any pension, your annual allowance is £40k a year. Unused allowance can be carried forwards from the past 3 years, as long as you were in a pension scheme in those years.

There is another rule that you can only get tax relief on 100% of your earnings or £3600 if greater. That applies to the current year only, only your contributions, not employers, and there is no carry forwards.

Now I am no where near that for the past 3 years but I would like to use most, if not all, of my allowance.

To find out what I can put into my SIPP is it a question of trawling though my pay slips and added up my pension contributions or is there another way of finding out?

Ask your scheme for the "pension input amounts" for the last few tax years. Then use an annual allowance calculator eg https://www.hl.co.uk/pensions/contributions/carry-forward-rule/annual-allowance-calculator

Then separately, you need to consider the 100% of earnings limit, so eg if your earnings this year after any workplace pension contributions are taken off is £50k, you can't put more than £50k gross into a pension (£40k net). £50k would blow this years AA but you likely have carry forwards which you can work out from the above.

Dazed_and_confused

"backdated" is maybe not the right term.

You can only get tax relief in the year the contribution is paid. So you might be able to carry forward some unused allowance to allow you to contribute more in the current tax year, subject to various rules others have commented on, but tax relief is restricted to the year the contribution in paid in.

ColdIron

You can carry forward unused annual allowances from previous years (subject to some qualifying rules) but you are still subject to your annual earnings limit which cannot be carried forward. You should be able to see previous years contributions via your pension provider

• To use carry forward, you must make the maximum allowable contribution in the current tax year (£40,000 in 2018-19) and can then use unused annual allowances from the three previous tax years, starting with the tax year three years ago.
• You can’t receive tax relief on contributions in excess of your earnings in a tax year and you only receive higher rate tax relief to the extent that you have paid it.

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/carry-forward