Calculating historic unused allowance with NHS pension

HamAndCheese

Hi All,

I'd like to put some money into a SIPP using my unused allowance from previous years.

Can anyone direct me to a guide for how to do this? I have (after much faffing) got hold of my pension savings statement from NHSBSA but I am unsure how to use these figures.

Thanks in advance,

Thomas

hugheskevi

Put the figures on the pension savings statement into the gov.uk calculator at this link and it will show how much carry-forward you have available for 2025/26.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6658503/calculating-historic-unused-allowance-with-nhs-pension

Will you have definitely used the current year's annual allowance?

QrizB

OP has said previously that they're a HR taxpayer. It's not a huge step from that to earning more than £60k.

Pipthecat

I was also wondering how you calculate unused allowance in the current year if you have a DB pension scheme.

Marcon

OP has said previously that they're a HR taxpayer. It's not a huge step from that to earning more than £60k.

Doesn't mean they've used the full £60K annual allowance…it's quite a big step to make that assumption.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81913535#Comment_81913535

I have no idea if this works but there is a calculator here

Defined Benefit Pension input amount tool

It seemed to me that it was impossible for someone in a DB scheme to know this tax year's PIA until AFTER the tax year had ended by which time it would be too late to make a SIPP contribution to fill up any gap (or use up carried forward allowance). Some people on here have said it is possible to do your own calculation and they can set it out in detail but maybe the tool up above helps.

Given the OP is asking about using previous years' unused allowance you would assume they had checked this year's allowance was already used up somehow. Either that or they don't know about this year but just want to make sure that if they do go over this years allowance with the SIPP contribution they will have enough previous year's allowance free to cover it

They'd also need to be sure they had enough taxable earnings this year to cover the SIPP contribution (when grossed up for the tax relief) and any employee contributions to the NHS scheme.

hugheskevi

It seemed to me that it was impossible for someone in a DB scheme to know this tax year's PIA until AFTER the tax year had ended by which time it would be too late to make a SIPP contribution to fill up any gap (or use up carried forward allowance). Some people on here have said it is possible to do your own calculation and they can set it out in detail but maybe the tool up above helps.

The older final salary schemes are far more complicated than the more modern career average pensions, but even then there are needless complications, like misalignments between the inflation rate adjustment used for Annual Allowance and the inflation rate used to revalue pensions. Some schemes have aligned, some have not. Tools are helpful to a point, but the real challenge is fully understanding scheme rules to be able to produce the input figures, and tools cannot assist with that.

It is certainly possible for an individual to accurately calculate their pension input in a DB scheme themselves. However, it does require someone who is numerically confident. It is also something that is likely to take a few years to get fully accurate as there are so many nuances in things like calculating final pensionable earnings precisely. As forecasts are produced and compared to the subsequent actual figures in Pension Savings Statements, discrepancies can be identified and the forecasts refined.

Fortunately, the main priority is to ensure that unused Annual Allowance from 3 years ago is fully utilised, as otherwise that is permanently lost. Unused allowance from the previous year and the one before that is much less important, as most people will be able to use those the next year. So that creates a nice margin for error - as long as the oldest carry-forward is fully used, and no more than total carry-forward available used, all is good.

So ideally, over time, an individual becomes better at forecasting their pension input, and gets to fully use up all their carry-forward over a number of years as they refine their calculations without incurring an Annual Allowance charge

Sarahspangles

https://forums.moneysavingexpert.com/discussion/6658503/calculating-historic-unused-allowance-with-nhs-pension

The problem I had was calculating the Pension Input Amounts. I requested these from NHSBSA in 2024/25, and meanwhile did my own calculation. They wrote to me in time for me to use their figures that year. Theirs were a bit higher than my workings, so I used theirs to make the maximum contribution. After I’d made the contribution to the SIPP they wrote again to say their figures were wrong and they’d write soon with corrected figures. They didn’t.

The moral is not to count on NHSBSA. Nobody from HMRC has come knocking - yet.