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Unused annual allowance

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btcp
btcp Posts: 304 Forumite
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in Auto-enrolment
What do I need to do to use my unused annual pension allowance from the previous years? I was never close to 40k annual contribution, which I understand is a pen untaxable limit for a year. It seems like this year and next year I should be able to contribute more than 40k, and there is information on HMRC site that people can carry over the unused allowance from the previous 3 years. Do I need to let them know or ask for it, or do I simply pay more and the amount will automatically get tax relief? How do they know I don’t pay more than my allowance?

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  • Paul_Herring
    Paul_Herring Posts: 7,481 Forumite
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    1) You need to earn more than £40K in the tax year you want to contribute. Your total contributed will be limited to your gross earnings for that tax year you make the contributions.
    2) Keep a (personal) record of what you have contributed in each each tax year in case HMRC should query it.

    Beyond that, not a lot. You don't specifically have to tell them you're using it - they'll be getting information from the pension providers for how much you actually contribute. Just make sure you're not going over any limits: https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings
    You can carry forward unused annual allowances from the 3 previous tax years. You do not need to report this to HMRC.
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  • btcp
    btcp Posts: 304 Forumite
    First Anniversary Photogenic Name Dropper First Post
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    Paul_Herring wrote: »
    1) You need to earn more than £40K in the tax year you want to contribute. Your total contributed will be limited to your gross earnings for that tax year you make the contributions.
    2) Keep a (personal) record of what you have contributed in each each tax year in case HMRC should query it.

    Beyond that, not a lot. You don't specifically have to tell them you're using it - they'll be getting information from the pension providers for how much you actually contribute. Just make sure you're not going over any limits: https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

    Thank you, that’s clear. I earn more, so no issue here.
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