Pension 3 year carry forward rule

MallyGirl

You can only use previous years allowances if you have exceeded this year's £60k allowance and you have sufficient income to pay in more than that. This doesn't apply in the case of non earners paying in £3600 gross

incus432

AFAIK pension providers won't stop you paying in more than your earnings as they dont actually know what your earnings are, and they will automatically collect income tax relief. But then you will have to pay that back later which may be messy.

bjorn_toby_wilde

incus432 said:

AFAIK pension providers won't stop you paying in more than your earnings as they dont actually know what your earnings are, and they will automatically collect income tax relief. But then you will have to pay that back later which may be messy.

Having done it myself by accident last year it is a little messy.

The pension provider alerted me and said they would have to inform HMRC. I then had to amend my self assessment online and pay back the tax relief.

Sarahspangles

bjorn_toby_wilde said:

incus432 said:

AFAIK pension providers won't stop you paying in more than your earnings as they dont actually know what your earnings are, and they will automatically collect income tax relief. But then you will have to pay that back later which may be messy.

Having done it myself by accident last year it is a little messy.

The pension provider alerted me and said they would have to inform HMRC. I then had to amend my self assessment online and pay back the tax relief.

And for completeness if you do it on PAYE the SIPP provider has to return a sum to you and separately reimburse HMRC for the over-claimed relief at source.

kinger101

QrizB said:

Scarum said:

"£60k is not really a high earner nowadays"... made me laugh.

Out of touch.

According to this table, there are roughly 36 million income tax payers in the UK.

According to this table, the top 10% earn £62k opa or more.

Does being in the top 10% make you a "high earner"? I guess it depends on your definition. It definitely makes you higher than average.

On thing to note is that this is taxable income, not earnings.  An important distinction which would alter the distribution somewhat.

I wouldn't call £60K high either, though I guess it is all subjective and relative.

DavidT67

The carry forward is of allowances, not earnings.  Pension contributions are constrained by current year earnings first, allowances secondly, and carry forward of allowances only come into play if current year uk taxable earned income is above £60,000.

Without any UK earned income you are limited to £2,880 in any given year.