Is there a Pension Provider that will open a pension with a CarryBack lumpsum contribution ?

robbo87

NoMore said:

robbo87 said:

 1) You can only personally contribute up to your earned income for the year (or £3600 if you are a non taxpayer)

and

 2) The max Pension contribution from all sources (including employer) is 40K p.a. This is known as the Annual Allowance (AA) and can be extended by unused allowance from the previous 3 years.

Note however both rules have to be satisfied, so you may well have unused Allowance of thousands of pounds, generally unless you have the same or more earned income, you can't make use of it.

d&c ignored the carryforward context of the original Q. Within that ignorance, he is of course correct.

I meet criteria 2. 

How about criteria 1 ? Both limits have to be satisfied for pension contributions, so you may well have carry forward available but  you may not have enough earned income to take advantage of it.

I'm confirming (&estimating) .. that's why I didn't say either way.. 

QrizB

robbo87 said:

NoMore said:

How about criteria 1 ? Both limits have to be satisfied for pension contributions, so you may well have carry forward available but  you may not have enough earned income to take advantage of it.

I'm confirming (&estimating) .. that's why I didn't say either way.. 

Great. So you're expecting to earn in excess of £40k this tax year. You can open a SIPP with part of that. Why the question about carry forward?

Dazed_and_C0nfused

QrizB said:

robbo87 said:

NoMore said:

How about criteria 1 ? Both limits have to be satisfied for pension contributions, so you may well have carry forward available but  you may not have enough earned income to take advantage of it.

I'm confirming (&estimating) .. that's why I didn't say either way.. 

Great. So you're expecting to earn in excess of £40k this tax year. You can open a SIPP with part of that. Why the question about carry forward?

In 2019 the op said this in another thread,

Currently bumbling along in part time selfemployment with no particular end date in mind. This pays all 'running costs' except 2-4kpa from savings.

Op's circumstances seem to have changed since then as otherwise it seems unlikely that carry forward, which would allow a larger contribution in the current tax year, not a contribution for 2019:20 would be relevant.

But maybe they are earning enough now and have also realised that Vanguard will accommodate what they want to do without any issues.

There's certainly no suggestion here Vanguard have decided to set their own limits that would prevent use of carry forward (to allow a larger contribution in the current tax year).

https://www.vanguardinvestor.co.uk/what-we-offer/personal-pension/personal-pension-account

Dazed_and_C0nfused

Just re-read the email the op had received from Vanguard and the op had definitely misunderstood it as there is nothing in it that suggests they don't allow current tax year contributions that are eligible because of carry forward.

But Vanguard have repeated the rubbish quoted on gov.uk about non taxpayers being limited to £2,880 (net).

We're unable to backdate unused pension allowances and anything you contribute will be treated as a contribution to the current tax year (2021/22).

If you are non-taxpayer then you can still contribute £2,880 this tax year and receive £720 tax relief from HMRC. I can see that you have done this on 29th July.

If your intention was to make an additional £2,880 this tax year as well as last, then as a non-taxpayer you would still be capped at a single contribution of £2,880. You must have the earnings in the current tax year to support your total contributions and be eligible for the tax relief.

SomeMadeUpName

Dazed_and_C0nfused said:

Just re-read the email the op had received from Vanguard and the op had definitely misunderstood it as there is nothing in it that suggests they don't allow current tax year contributions that are eligible because of carry forward.

But Vanguard have repeated the rubbish quoted on gov.uk about non taxpayers being limited to £2,880 (net).

We're unable to backdate unused pension allowances and anything you contribute will be treated as a contribution to the current tax year (2021/22).

If you are non-taxpayer then you can still contribute £2,880 this tax year and receive £720 tax relief from HMRC. I can see that you have done this on 29th July.

If your intention was to make an additional £2,880 this tax year as well as last, then as a non-taxpayer you would still be capped at a single contribution of £2,880. You must have the earnings in the current tax year to support your total contributions and be eligible for the tax relief.

Wow, that is really poorly worded isn't it.

You can be a tax payer and still limited to £2880/£3600 or you can be a non taxpayer able to make contributions way over £2880/£3600.

One of the first things I learned from this forum when I started to look closer at pensions was the (annoying for me) difference between taxable income and earned income.  You'ld think HMRC would have learned it too.

Dazed_and_C0nfused

It has been reported to gov.uk multiple times but there is either no willingness to change it or they don't understand their own rules!

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

doodling

Hi,

Leaving aside the wording of the original question, I have a vague recollection that in order to make use of carry forward you need to have been a member of a pension in the year you are carrying from. Am I mistaken?

Dazed_and_C0nfused

doodling said:

Hi,

Leaving aside the wording of the original question, I have a vague recollection that in order to make use of carry forward you need to have been a member of a pension in the year you are carrying from. Am I mistaken?

No, you are correct.  This is Pru Advisers explanation,

Anyone who is eligible can carry forward any unused annual allowances from a tax year in which they were a member of, or joined, a UK registered pension scheme. This is a very broad rule. ‘Member’ includes:

Active: currently accruing/ building up benefits in the scheme, paying individual contributions or receiving contributions on their behalf, for example, from an employer or any other third party

Deferred: has a paid-up fund, or a right to receive pension benefits at a later date

Pensioner: receiving payment of benefits from the scheme, such as a scheme pension

Pension credit: member has received a pension credit (following a divorce and as directed in a pension sharing court order)

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/annual-allowance-carry-forward/