USS pension: carry forward some unused AA

dllive

Hi

Ive decided - in addition to my monthly AVCs - to make a few lump sum payments this year.

I can see on my last 3 annual USS statements that Ive used £10k of my AA. Ive been using https://www.ussbenefitmodeller.co.uk/annual_allowance to estimate how much over the AA Im going to be after I make some lump sum payments for the 22/23 tax year.

It looks like Ill need to carry forward some unused AA from previous tax years (I think Im only allowed up to the previous 3 years?)

So, given that in each of the previous 3 years Ive only used £10k of my £40k AA, does that mean that I have £90k of unclaimed AA that I can carry forward to this year and future years?

For example, it may be that in 22/23 I go over my AA by £10k so will need to use £10k of the £90k amount; and in 23/24 I may go over by £20k of my AA so will need to use £20k of the remaining £80k etc...

Is that how it works?

Thanks

QrizB

dllive said:

So, given that in each of the previous 3 years Ive only used £10k of my £40k AA, does that mean that I have £90k of unclaimed AA that I can carry forward to this year and future years?

Not quite.

For example, it may be that in 22/23 I go over my AA by £10k so will need to use £10k of the £90k amount

In 22/23 (this year) you have £40k allowance, plus carry-forward from 19/20, 20/21 and 21/22. That's £(30+30+30)k to carry forward. If you go over your allowance it will will be deducted from the 19/20 carry-forward first, then 20/21 and finally 21/22.

in 23/24 I may go over by £20k of my AA so will need to use £20k of the remaining £80k etc...

In 23/24, you have £40k allowance plus carry-forward from 20/21, 21/22 and 22/23. That's £(30+30+0)k to carry forward. If you go over by £10k it will be deducted from the 20/21 carry-forward first.

If you carry on like this for a couple more years, in 25/26 you will have £40k allowance plus carry-forward from 22/23, 23/24 and 24/25. That will be £(0+0+0)k to carry forward, ie. none.

Albermarle

Are you aware that separate from the Annual Allowance, you can not contribute more to a pension in one tax year than you earn ?

So your earnings level may restrict how much of the carried forward allowance you can use.