Can I use carry forward?

ChilliBob

Hey guys,
I'm drawing my info together for my annual tax return and I have notice I forgot to contribute to my pension!

I can only contribute £2880 as I don't have any employment and 'conventional' income from a salary.

Obviously a bit annoying as I miss our on the ~£700 odd from the government!..

Am I able to pay double this year, so, 5760?

* Again I won't have income in the form of a salary.
* Income from dividends and savings interest will be more than the 5,760

I have been in the same scheme for ages, at least 2014 when it moved from one provider to another. (this is a Scottish Widows pension from a former workplace)

Any help much appreciated 

SVaz

As far as I know, you can’t because people have to have used their whole allowance (£60k) ) from employment / self employment,  before using carry over. 

SVaz

Set up a direct debit so you don’t forget for this current tax year 😉

ChilliBob

SVaz said:

As far as I know, you can’t because people have to have used their whole allowance (£60k) ) from employment / self employment,  before using carry over. 

I thought the whole allowance was capped at either £60k or whatever your annual salary is - e.g. if you earn £25k your max is this, not 60.. if I don't earn anything then I can use my whole allowance (2.88k)... perhaps

NoMore

Your AA is still 60k, however you can't get any tax relief on anything above 2880 (3600 gross) so its not worth paying anymore into a pension. It's two separate things, so no you can't use carry forward as said because your not paying more than 60k in to the pension

Doctor_Who

ChilliBob said:

Hey guys,
I'm drawing my info together for my annual tax return and I have notice I forgot to contribute to my pension!

I can only contribute £2880 as I don't have any employment and 'conventional' income from a salary.

Obviously a bit annoying as I miss our on the ~£700 odd from the government!..

Am I able to pay double this year, so, 5760?

* Again I won't have income in the form of a salary.
* Income from dividends and savings interest will be more than the 5,760

I have been in the same scheme for ages, at least 2014 when it moved from one provider to another. (this is a Scottish Widows pension from a former workplace)

Any help much appreciated 

Dividend and savings interest aren't 'relevant income' for pension tax relief. If you have zero 'relevant income' then you can contribute £3600 gross (£2880 net) and receive £720 tax relief each tax year. Carry forward can only be considered if you want to contribute more than the £60K AA and you have enough earned income in the current tax year (i.e. more than £60K).

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#earnings

ChilliBob

Ah that's bad new, oh well, just goes to show I must be more on the ball this tax year! 

Doctor_Who

ChilliBob said:

Ah that's bad new, oh well, just goes to show I must be more on the ball this tax year! 

Yes - I tend to do my £2880 net/£3600 gross pension contribution at the start of the tax year (same with £20K ISA subscription) to get it out of the way!