Statement...True or False

sgx2000

"Pension carry forward only applies to anyone earning over £60k this year.".....

This..... https://www.tax.service.gov.uk/pension-annual-allowance-calculator 
Implies that lower than £60k earners can also pay in more than their salary for the current year.

I have assumed that I could only pay into my pension, up to my salary each year.
And, have done this for the last 2 years to get the tax relief.....  (wish I had realized this 5 years ago)

NoMore

sgx2000 said:

I have assumed that I could only pay into my pension, up to my salary each year.
And, have done this for the last 2 years to get the tax relief.....  (wish I had realized this 5 years ago)

But you wouldn't get the tax relief above your salary.

Yes you could pay in more than your salary up to the AA and not get the AA charge, however due to the tax relief limit, you won't get tax relief above the amount of your Salary either, so that makes it pointless to do for the vast majority of people and in fact will actually lose you money as your now bring charged tax twice.

There's two limits that you have to worry about, that link is only considering one of them.

hugheskevi

Many people in final salary schemes have pension inputs over £60K and earn under £60K. They use carry forward. The statement is false.

Cobbler_tone

https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance

Marcon

sgx2000 said:

"Pension carry forward only applies to anyone earning over £60k this year.".....

This..... https://www.tax.service.gov.uk/pension-annual-allowance-calculator 
Implies that lower than £60k earners can also pay in more than their salary for the current year.

I have assumed that I could only pay into my pension, up to my salary each year.
And, have done this for the last 2 years to get the tax relief.....  (wish I had realized this 5 years ago)

You've asked a question but also added a caveat: I have assumed that I could only pay into my pension, up to my salary each year.

That caveat means the statement is correct if you are using carry forward and making personal contributions (and want tax relief!).  Employer contributions (including those resulting from salary sacrifice arrangements) are not restricted to earnings, which is why the statement is false when applied to a DB scheme, as already pointed out above by @hugheskevi

Grumpy_chap

sgx2000 said:

"Pension carry forward only applies to anyone earning over £60k this year.".....

This..... https://www.tax.service.gov.uk/pension-annual-allowance-calculator 
Implies that lower than £60k earners can also pay in more than their salary for the current year.

I have assumed that I could only pay into my pension, up to my salary each year.
And, have done this for the last 2 years to get the tax relief.....  (wish I had realized this 5 years ago)

Individual contributions are restricted to relevant earnings so an individual cannot contribute more then their salary.
Employer contributions are not so restricted so contributions can exceed salary through either DB schemes (with the assessed contribution equivalent) or via SS schemes (or just a very generous employer, but that really is going to be a very edge case).

dunstonh

"Pension carry forward only applies to anyone earning over £60k this year.".....

False.

Some people do not need to be earning over £60k to use carry forward.  Some people do.

Employer contributions, for example, are not dependent on salary and can use carry forward.
e.g. company director earning £12,570 salary making a £100,000 employer contribution via their limited company.

Sarahspangles

sgx2000 said:

"Pension carry forward only applies to anyone earning over £60k this year.".....

This..... https://www.tax.service.gov.uk/pension-annual-allowance-calculator 
Implies that lower than £60k earners can also pay in more than their salary for the current year.

I have assumed that I could only pay into my pension, up to my salary each year.
And, have done this for the last 2 years to get the tax relief.....  (wish I had realized this 5 years ago)

False. Your relevant UK earnings may be less than £60k, which limits the amount you pay in. However net relevant earnings are not the measure that the Annual Allowance uses. People actively contributing to defined benefit pensions (e.g. some public sector schemes) have to include a Pension Input Amount in their calculation of contributions, it represents growth in their DB benefits.

I earn over £60k but my relevant UK earnings (or is it the balance of them, I’m never sure) are reduced below this by net pay pension contributions. My PIA is a lot more than I’m actually contributing in my pay packet (more than double). I am also paying most of the rest of my earnings into my SIPP. I exceed the Annual Allowance and have needed to use carry forward two years running. If I wasn’t on the point of retiring I could repeat this for one more year, after which I’d have no more scope for carry forward.