Believe I've over paid into a SIPP.

Spendless

A while back I saw a FA about some money me and my husband had. I mentioned that I had various pensions with differing amounts in, many from years of temporry work and a couple larger ones. 

The FA recommended opening a SIPP and she collated all my pensions from the various providers and put in into this but also £16k from me which with tax relief became £20k. This was deposited in March 2024 by the FA from the money I sent over

I've recently seen that this is incorrect, you can only put into a SIPP the gross amount of your wages and that includes the government's tax relief and should also include any contributions into a workplace pension.

I didn't even earn £ 16k in the 23/24 tax year, let alone £20k. My work history for that year is working 
April - July/Aug - in 1 employment - via an agency paid into a workplace pension - unsure of amount

Aug - Dec - in a different employment - paid into work place pension.- approx £300 paid into that company pension

A couple of days at the end of this tax year starting on maybe 3rd April 24 and earning around £250 for the 3 days that ended this tax year - nothing paid into that  company pension.

Total gross for the year is approx £14k from the above 3 jobs. I appreciate I need to dig all the paperwork out to be completely accurate with figures but at the minute I want to just clarify that what I think is correct and the amount that the £16k that was transferred into  the SIPP from my bank account via the FA.

I believe if I have overpaid then it needs reporting to the SIPP provider. Unsure if that should be my first port of call or raise it with the FA first. 

Appreciate any help.  

molerat

As you did this via them, and I assume under their advice, they would be the first to contact as they could be held liable if they gave incorrect advice.

Marcon

molerat said:

As you did this via them, and I assume under their advice, they would be the first to contact as they could be held liable if they gave incorrect advice.

Depends if the adviser actually gave advice on the amount OP could contribute, which is unlikely but not impossible. They are certainly a reasonable first port of call to help unscramble this.

No great disaster:

Tax relief on personal contributions is limited to the higher of £3,600 each tax year or 100% of relevant UK earnings.

Of course, some individuals, particularly the self-employed, find it difficult to predict what their earnings are going to be in a tax year and so may end up paying more than their earnings.

When someone pays contributions greater than their relevant UK earnings (or £3,600, if greater) in a tax year, they can request a refund of the excess amount over their earnings (or £3,600, if greater). Known as a refund of excess contributions lump sum, this refund may be essential when an individual has gone over their tax relief limit, and the scheme only accept contributions that attract tax relief.

An individual can only receive a refund after the start of the next tax year, once all evidence of their earnings for the previous year has been provided. 

Where the relief at source method has been used for receiving tax relief, the basic rate tax relief on the excess contributions that’s been received from HMRC must be returned to HMRC.  

HMRC Pensions Tax Manual - PTM045000 - Contributions: refunds of contributions

Source: https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/refund-of-contributions/

Spendless

Thank you for replies. FA never gave advice on amount I could contribute. Me and husband had a meeting where we said we have £x money and don't know what we should be doing with it and also mentioned my previous  workplace pensions that had variousamounts in. It was the FA who said put £x into this and  £y into that and in that convo said send me £16k and the FA transferred it into a SIPP. I wasn't aware of the rules of contributions until I saw something online recently.

We will be contacting the FA about this. 

Juno_Moneta

OP it may be fine - your ‘overpayment’ seems relatively small and your IFA may be relying on the contribution carry forward rules?

For example if you told them you had certain income in the prior tax year(?), and also didn’t fully use the prior tax years contribution limit(?) it’s quite likely you are ok - when you speak to them they might want prior tax years income details so have these to hand. 

Important note: Whilst your contribution larger than this years earnings is potentially allowed (as per above only if you have prior year earnings and unused allowance) and can stay in the SIPP, tax relief is only given up to the amount matching your earnings limit in this tax year (complicated isn’t it!).

So a small part of your contribution may not attract tax relief unfortunately. But that’s not as big a deal as worrying about an overpayment needing to be refunded etc. Your IFA will calculate all this for you. 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

Dazed_and_C0nfused

Juno_Moneta said:

OP it may be fine - your ‘overpayment’ seems relatively small and your IFA may be relying on the contribution carry forward rules?

For example if you told them you had certain income in the prior tax year(?), and also didn’t fully use the prior tax years contribution limit(?) it’s quite likely you are ok - when you speak to them they might want prior tax years income details so have these to hand. 

Important note: Whilst your contribution larger than this years earnings is potentially allowed (as per above only if you have prior year earnings and unused allowance) and can stay in the SIPP, tax relief is only given up to the amount matching your earnings limit in this tax year (complicated isn’t it!).

So a small part of your contribution may not attract tax relief unfortunately. But that’s not as big a deal as worrying about an overpayment needing to be refunded etc. Your IFA will calculate all this for you. 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

Nothing the op has posted indicates carry forward of unused annual allowance is a factor here.

Neither do they mention using an IFA.

Juno_Moneta

Dazed_and_C0nfused said:

Nothing the op has posted indicates carry forward of unused annual allowance is a factor here.

Neither do they mention using an IFA.

- Er, that’s why I said they ‘may be relying’ thats clearly my guess not something quoted by OP. 

- Er, the OP starts with “A while back I saw a FA”. I assume this stands for Financial Advisor and the OP missed the I.
- Not a big deal is it - Happy New Year!

QrizB

Juno_Moneta said:

Dazed_and_C0nfused said:

Nothing the op has posted indicates carry forward of unused annual allowance is a factor here.

- Er, that’s why I said they ‘may be relying’ thats clearly my guess not something quoted by OP. 

For OP to use carry-forward they'd need to have made at least £60k of pension contributions in the tax year. There's nothing in their posts to say they did, and quite a few reasons to think they didn't.

Juno_Moneta said:

Dazed_and_C0nfused said:

Neither do they mention using an IFA.

- Er, the OP starts with “A while back I saw a FA”. I assume this stands for Financial Advisor and the OP missed the I.

The I in IFA stands for Independent. Not all FAs are IFAs. It's entirely possible that the OP saw an FA who isn't I.

Juno_Moneta

Well I’ll leave the thread now, wasn’t expecting to start 2026 with people coming at me about semantics and spelling. I know what the I stands for. 

Sigh. 

OP good luck with your conversation with whoever you consulted

Spendless

Hi, I didnt earn £60k in the previous year and never have, so my understanding is roll over doesnt apply. 

The FA was a financial adviser not an independant one which she did tell us at the time. As she gave us several ideas what to do with our money at different places  we didnt really see it as an issue at the time.

Since then she has become  or maybe as Ive become more aware, that  she is a partner (if thats the correct term??) of a financial place that has high charges and is frequently criticised for doing so. This is who my SIPP is with. 

This is a seperate issue to me than unwittingly paying too much into a SIPP because I handed over the amount the FA told me to. Apologies if Ive muddied the waters with replies by not including this info but I just saw it as 2 seperate things. 

Juno_Moneta

Thanks for clarifying OP - all useful extra info - there are plenty of people here who may be able to make further suggestions. Hope you sort it out!