We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Annual Allowance and Salary
Comments
-
Yes, you can use carry forwards. I see the "can't use carry forwards if you earn under £60k" bull is still being spouted. It is rubbish.
If your taxable income after workplace pension conts is £59,999 and you have a PIA from the DB scheme of £32k, then you could contribute £59,999 (gross) to a SIPP provided you have at least £32k of carry forwards available.
1 -
It depends which calculation your employer is using, but pensionable pay can be the same as gross pay.
0 -
Maybe you need to check your payslips and P60 then.
Assuming by civil service (your next post refers) you mean Alpha then that uses the net pay method. So salary might be say £58k but your taxable earnings would only be say £52k.
1 -
ah! but I am only putting in £57K. The Defined benefit pension input is not a contribution it is an estimate/calculation of how much my DB pension has grown in value.
If that estimate plus my £57K goes over £60K then that's when I was hoping to use carry forward.
If not then any Civil Servant earning under £60K is going to be very limited in what he can stash away, and also likely to incur tax charges on promotion etc
I'm almost certain the recent mcloud adjustments included carry forward - if they only applied to peopel earning over £60K then I'm sure they would have said so!
0 -
The relevant definitions for alpha are:
(1) Salary - your contracted salary
(2) Pensionable pay - salary plus any pensionable allowances, ignores any benefits purchased via salary sacrifice, eg, bicycles
(3) Gross pay - salary plus pensionable allowances plus non-pensionable allowances plus bonuses, less salary sacrifice purchases
(4) Taxable earnings - Gross pay less pension contributions less salary sacrifice purchases
(5) Pension contributions - calculated based on pensionable pay
0 -
I'm almost certain the recent mcloud adjustments included carry forward - if they only applied to peopel earning over £60K then I'm sure they would have said so!
For members who did not take any Remedy period benefits before 1 October 2023, the McCloud changes rolled their 2015-22 pension accrual back into their legacy scheme.
Pension Inputs for 2015-23 were recalculated on the rolled-back basis. Annual Allowance position was then reassessed, with carry forward available in the usual way.
1 -
Use the calculator here:
That doesn't ask about salary ( apart from checking its not over £200k) so I would think youll be able to use carry over.
0 -
Thank you guys that's a relief.
I think the answer to my question is that I can't put in more than my pensionable salary (which in my case is for practical purposes with Alpha is all of it) - if the defined benefit pension input takes this over £60K then I can used unused allowance from previous 3 years to mitigate any tax
0 -
ummm - what has taxable earnings got to do with pensionable earnings?
My taxable earnings are worked out after after pension contributions deducted but my pension accrues based upon a percentage of pensionable earnings, certainly not taxable earnings!
0 -
Well for most people taxable earnings will be a key factor in what they can then contribute to a pension using the relief at source method and receive tax relief on.
Or where they make a gross contribution outside of payroll to the DB scheme, for example to buy added pension.
0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.1K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.3K Spending & Discounts
- 247.1K Work, Benefits & Business
- 603.7K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards