help with pension contributions - be gentle

zagfles

jimboger1 said:

Sarahspangles said:

zagfles said:

Sarahspangles said:

jimboger1 said:

hi Sarah, I can post links as I'm new to the forum - I just googled pension carry forward calculator, and used the first couple I found and they all gave me the same figure 

I put it into the spreadsheet I used for my own checks. I get the remaining AA available to carry forward from 2022/23, which you could still use this year, to a further £14,305. It’s not far out but maybe someone else will check. You need to take full advantage of whatever it is, as you’ve used up all the Annual Allowance for the three years prior to 2025/26 so will be restricted to £60k.

You definitely can’t use carry back from 2026/27 to cover a breach in 2025/26.

That agrees with the HL calculato
My manual calc also agrees:

2021/22 is the first year that required carry forwards, and the figures show there's easily enough c/f available from 18/19 and 19/20, so 20/21 is not needed and therefore still available for future years. 

2023/24 is next year that requires c/f and needs 35073 of which 32411 can come form 20/21, and 2662 from 22/23. 

This leaves 28585 from 22/23 still available for 24/25 and/or 25/26. 14280 already used this tax year, so 14305 still available either for further conts this tax year or could be used next tax year. 

Thanks! I am genuinely chuffed my maths was right.

@jimboger1 Maxing out your pension contributions for tax relief is fine but you also need a plan to get the money out again, ideally without unnecessarily paying higher rate tax. From our experience, as a couple receiving pension lump sums and inheritance, you then need a plan so you don’t unnecessarily pay tax on savings interest/dividends etc. Your ISA allowance it’s valuable here, that’s another one where you use it or lose it each year.

The other rookie mistake I spot some high earners make is not considering their partner’s position if they are in a couple. It’s too late when someone is paying higher rate tax to realise their wife has several years of £12,570 personal allowance going to waste.

thank you Sarah, and thanks for the advice - the plan to get the money to is my next task tbh - my wife currently works at around £12k per year, but we also share rental properties with a £37k income so it's taking a bit of juggling - problem I have is due to past experience I am very wary of IFA's   - although I understand they are not all bad - lol

So she's probably restricted to £12k gross SIPP conts. Unearned income doesn't generally count. See PTM044100 - Contributions: tax relief for members: conditions - HMRC internal manual - GOV.UK for a full list. 

Grumpy_chap

zagfles said:

jimboger1 said:

thank you Sarah, and thanks for the advice - the plan to get the money to is my next task tbh - my wife currently works at around £12k per year, but we also share rental properties with a £37k income so it's taking a bit of juggling - problem I have is due to past experience I am very wary of IFA's   - although I understand they are not all bad - lol

So she's probably restricted to £12k gross SIPP conts. Unearned income doesn't generally count. See PTM044100 - Contributions: tax relief for members: conditions - HMRC internal manual - GOV.UK for a full list. 

Yes, rental income does not count for pension contributions.  I know as my wife is restricted to the £2,880 (grossed up to £3.6k) pension contributions for exactly that reason - not working but BTL income.

I note the OP says "share rental properties".  There are options to reassign rental income between spouses.  I am unsure of the process, but the OP could check.