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Estimating the amount of annual allowance used in defined benefit pensions scheme

Bobziz
Posts: 670 Forumite

Hi,
I'm trying to calculate how much of my annual pension allowance I'll use this year through my DB scheme. I'm using the tool provided here: Defined Benefit Pension input amount tool (mandg.com).
The calculator returns a negative value, which I manually calculate to be - 7225. Is this likely to be correct and if so does that mean that I wont use any of my AA ?
My calculation is as follows: ((18629*16)+5031) - ((17867 * 16) + 4971) * 6.7%) = -7225.
Many thanks.
I'm trying to calculate how much of my annual pension allowance I'll use this year through my DB scheme. I'm using the tool provided here: Defined Benefit Pension input amount tool (mandg.com).
The calculator returns a negative value, which I manually calculate to be - 7225. Is this likely to be correct and if so does that mean that I wont use any of my AA ?
My calculation is as follows: ((18629*16)+5031) - ((17867 * 16) + 4971) * 6.7%) = -7225.
Many thanks.
0
Comments
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If the PIA comes out as negative then this is treated as zero AA used.1
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NoMore said:If the PIA comes out as negative then this is treated as zero AA used.0
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Its because the actual value of your benefits have not increased due to inflation. Basically your salary that defines the benefits has not increased in line with the inflation increase applied to the PIA value.3
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There's usually a lag between the inflation figures HMRC use for the PIA calculation and the scheme uses for increases in the accrued pension. As inflation has been volatile in recent years this can have a big impact. Another year you might see the PIA being massive because of this.2
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Thanks, I believe my scheme uses cpi at September so same as the HMRC PIA figure.
Yes my PIA has varied massively since 2020/21 but as my salary increases are fairly predictable, I can have a good stab at predicting my AA available for other pension contributions.0 -
Bobziz said:Thanks, I believe my scheme uses cpi at September so same as the HMRC PIA figure.
Yes my PIA has varied massively since 2020/21 but as my salary increases are fairly predictable, I can have a good stab at predicting my AA available for other pension contributions.1
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