Stay at home mum, can I use my carried forward allowance to pay into a new pension?

CandyKitten

I’m currently a full time stay at home mum and have not paid into my former work pension for 5 years, and to be honest I’m not sure if I am able to make personal contributions into it. I am looking into consolidating my pensions and ideally, I would like to open a new SIPP.

I would like to make use of the carried forward allowance and understand as a non worker I can personally pay in £2,880 per year for up to 3 previous tax years. But I need to have held a pension during these previous tax periods.

My question is, do I have to pay into my former work pension or would I be allowed under the rules to open a new SIPP and contribute up to 3 previous tax years into the new one? As technically I have held a valid pension over this time period but it’s not one that I want/am able to pay into.

I’ve tried to get trough to HMRC but just get cut off after a period of time.

Dazed_and_C0nfused

CandyKitten said:

I’m currently a full time stay at home mum and have not paid into my former work pension for 5 years, and to be honest I’m not sure if I am able to make personal contributions into it. I am looking into consolidating my pensions and ideally, I would like to open a new SIPP.

I would like to make use of the carried forward allowance and understand as a non worker I can personally pay in £2,880 per year for up to 3 previous tax years. But I need to have held a pension during these previous tax periods.

My question is, do I have to pay into my former work pension or would I be allowed under the rules to open a new SIPP and contribute up to 3 previous tax years into the new one? As technically I have held a valid pension over this time period but it’s not one that I want/am able to pay into.

I’ve tried to get trough to HMRC but just get cut off after a period of time.

Somewhere along the line you have misunderstood the carry forward rule.

You can only use carry forward once the current year's annual allowance, which is £60,000, has been used.

As you can only contribute £3,600 (inclusive of the basic rate tax relief that will be added to your net contribution) carry forward simply isn't relevant to you at the moment.

You can never make contributions for any tax year other than the current one so you have missed out on the ability to contribute for the previous 3 tax years.  Just make sure you contribute your own maximum (£2,880 net, £3,600 gross) this tax year and in future (whilst not earning more than £3,600).

QrizB

There are two limits; the annual allowance limits the amount you can pay into a pension, and your taxable earnings limit the amount of tax relief you can receive.

You have an annual allowance of £60k.

If you have a job or side hustle where you're earning more than £60k pa, you can use carry-forward of unused annual allowance from previous years.

You've not mentioned any job, so this is unlikely to be available to you.

With no taxable earnings, you're still allowed to contribute £3600 gross (£2880 net) to a pension. Carry-forward is not available in this situation.

kermchem

And make sure that you are earning the NI credits towards a state pension. Are you getting child benefit? 

Brie

I've not sees a standard work pension that will allow any payments in to it for ex employees unless they are actually run as group personal pensions.  Certainly not if it was a defined benefits scheme.  Defined contribution schemes may allow something but it might be a case of needing to move it either within the same admin company or to a new pension provider.  

Do check your state pension forecast (link below) for the credits you should be receiving while "not working" (being a SAHM just means you're working but without really being paid in my opinion).

bjorn_toby_wilde

Brie said:

I've not sees a standard work pension that will allow any payments in to it for ex employees unless they are actually run as group personal pensions.  Certainly not if it was a defined benefits scheme.  Defined contribution schemes may allow something but it might be a case of needing to move it either within the same admin company or to a new pension provider.  

Do check your state pension forecast (link below) for the credits you should be receiving while "not working" (being a SAHM just means you're working but without really being paid in my opinion).

I’m not sure that’s correct. I made a payment into my last occupational DC pension with Aviva several months after I left their employment.

Marcon

bjorn_toby_wilde said:

Brie said:

I've not sees a standard work pension that will allow any payments in to it for ex employees unless they are actually run as group personal pensions.  Certainly not if it was a defined benefits scheme.  Defined contribution schemes may allow something but it might be a case of needing to move it either within the same admin company or to a new pension provider.  

Do check your state pension forecast (link below) for the credits you should be receiving while "not working" (being a SAHM just means you're working but without really being paid in my opinion).

I’m not sure that’s correct. I made a payment into my last occupational DC pension with Aviva several months after I left their employment.

It certainly doesn't have to be a group personal pension - plenty of other workplace schemes accept contributions from former employees. The one which spring instantly to mind is NEST.