Carry-Forward of annual allowance for pension contributions

legalfreak

I want to ensure that I understand the rules correctly  - even after seeing some posts on here.
Have a DC pension (3 small DC pots actually but for simplicity say 1 only).
Income from work this year will be less than £40K, around 28K. 

As I won't be able to take advantage of the £40,000 annual allowance this year (due to the above low-ish earnings), does this mean that I cannot take advantage of the Carry Forward rules for the past 3 tax years?

Many thanks!

RacingDriver

Yes that is correct, carry forward is only available if you have relevant earnings over £40,000.

legalfreak

Thank you! I did think what does 'relevant' earnings mean but I have now googled and checked the HMRC site so I can see that it is broader than income from work. However, I don't have these categories so doesn't apply to me in any case. 

zagfles

legalfreak said:

Thank you! I did think what does 'relevant' earnings mean but I have now googled and checked the HMRC site so I can see that it is broader than income from work. However, I don't have these categories so doesn't apply to me in any case. 

You can only get tax relief on contributions up to your relevant earnings. There is no carry fowards on this.

Carry forwards applies to the annual allowance, which at £40k (assuming the MPAA doesn't apply) will likely be more than your relevant earnings plus employer contributions/pension input.

It's possible with a generous defined benefit pension scheme and an above inflation payrise to exceed the AA on a £28k salary if you put all your relevant earnings in, but unlikely.