Unused pension allowance from previous years

rothers

Morning all,

My wife pays into an NHS pension and also has a SIPP, this year we have paid her total wage into her pensions however she has not contributed into her SIPP last year. Is it possible for her to still do so and receive the tax relief contribution from the government?

Many Thanks

Dazed_and_C0nfused

rothers said:

Morning all,

My wife pays into an NHS pension and also has a SIPP, this year we have paid her total wage into her pensions however she has not contributed into her SIPP last year. Is it possible for her to still do so and receive the tax relief contribution from the government?

Many Thanks

Do you mean her taxable earnings (not salary) are say £30,000 and she has paid £30,000 into a SIPP.  Which has then had £7,500 in basic rate tax relief added by the pension company, making a gross contribution of £37,500?

Or do you mean she paid £24,000 and the gross contribution was £30,000 including the basic rate tax relief?

doodling

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

Grumpy_chap

The maximum that an individual can contribute to a pension is limited to relevant earnings.
That includes any employee contributions to a workplace pension.  (Employer contributions are not covered by the earnings limit.)

doodling

Hi,

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

Sorry, I should have said "If all earned income for the year (before tax) has already been paid into the NHS pension /  SIPP then no further tax relief is available "  The personal (not employer) NHS pension contributions count towards that limit as well as those to the SIPP.

rothers

Dazed_and_C0nfused said:

rothers said:

Morning all,

My wife pays into an NHS pension and also has a SIPP, this year we have paid her total wage into her pensions however she has not contributed into her SIPP last year. Is it possible for her to still do so and receive the tax relief contribution from the government?

Many Thanks

Do you mean her taxable earnings (not salary) are say £30,000 and she has paid £30,000 into a SIPP.  Which has then had £7,500 in basic rate tax relief added by the pension company, making a gross contribution of £37,500?

Or do you mean she paid £24,000 and the gross contribution was £30,000 including the basic rate tax relief?

The total of her contribution plus the tax relief equals her taxable income, I was just asking if she could contribute more as she hadn't contributed anything above her NHS pension for the tax year 2023/24.

rothers

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

I read somewhere that there is a three year rule where you can make up pension payments from previous years, does that not apply to her then?

p00hsticks

rothers said:

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

I read somewhere that there is a three year rule where you can make up pension payments from previous years, does that not apply to her then?

Were her total earnings less than £60k ?

rothers

p00hsticks said:

rothers said:

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

I read somewhere that there is a three year rule where you can make up pension payments from previous years, does that not apply to her then?

Were her total earnings less than £60k ?

Yes, around £37k

Dazed_and_C0nfused

rothers said:

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

I read somewhere that there is a three year rule where you can make up pension payments from previous years, does that not apply to her then?

There is no such rule.

You can carry forward unused annual allowance to facilitate additional contributions in the current tax year.  You cannot "make up pension payments from previous years".

And as she has already contributed the maximum she can for tax relief purposes then this isn't relevant to her anyway.

p00hsticks

rothers said:

p00hsticks said:

rothers said:

doodling said:

Hi,

No.  Tax relief in any tax year is (with the exception of very high earners where there is an additional limit) applied to the larger of your earned income or £3600.

If all earned income for the year (before tax) has already been paid into the SIPP then no further tax relief is available 

I read somewhere that there is a three year rule where you can make up pension payments from previous years, does that not apply to her then?

Were her total earnings less than £60k ?

Yes, around £37k

In that case, my (inexpert) understanding is that as she hasn't used all her pension tax allowance for this year, she can't carry forward anything from previous years. Pension tax relief for a year is limited to £60k or earnings, whichever is the lower.