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  • FIRST POST
    • scoot65
    • By scoot65 23rd Feb 18, 7:10 PM
    • 176Posts
    • 77Thanks
    scoot65
    Unused annual allowance for DB scheme member Calc.
    • #1
    • 23rd Feb 18, 7:10 PM
    Unused annual allowance for DB scheme member Calc. 23rd Feb 18 at 7:10 PM
    I'm looking to open a SIPP and I need to know how much I will be allowed to put into it annually.

    I'm 52 years old (almost 53), my state retirement age is 67, ( I think it's still 65 regarding LGPS) I'm a basic rate tax payer and I've been in the LGPS for 27 years. Currently in full time, permanent employment with a Local Authority and thus still contributing into the LGPS.

    I've received the latest LGPS Annual Statement of Benefits at 31st March 2017.

    From the 1st April 2014 the Scene changed from a Final Salary (FS) to a Carer Average Revalued Earnings (care)

    The statement shows the following:-

    CARE Pension Build up (post 1st April 2014 service) opening balance figure

    Main Section 01/04/16 -31/03/17 figure

    Final Salary Benefits (pre 1st April 2014 service)
    Annual Pension figure
    Tax Free Lump Sum figure

    Total Value of Benefits at 31st March 2017
    Annual Pension figure
    Tax Free Lump Sum figure
    Survivors Pension figure

    How do I calculate what my annual allowance is so that I know how much I can put into a SIPP this financial year?

    Many Thanks.....
    Last edited by scoot65; 26-02-2018 at 11:39 AM.
Page 2
    • zagfles
    • By zagfles 4th Mar 18, 7:36 PM
    • 13,196 Posts
    • 11,203 Thanks
    zagfles
    If an LGPS member earns 30K, then the pension input amount for their CARE scheme membership will be 9786.
    Originally posted by hyubh
    Yes, so someone on 30k would get very close the annual allowance if they put 100% of earnings into their pension. It'd vary a bit if there's a discrepancy between the inflation figure used for increasing accrued LGPS pension, and the inflation figure HMRC use for AA purposes. So even 30k is not "safe".

    This myth that the annual allowance doesn't apply unless you earn over 40k need quashing.
    • scoot65
    • By scoot65 20th Mar 18, 2:21 PM
    • 176 Posts
    • 77 Thanks
    scoot65
    OK, I'm back.....

    Just to recap here is the information I obtained from my pension admin (LGPS)

    UPDATE.....

    As suggested by other posters, I contacted my LGPS pensions administrator and requested information regarding my annual allowance / unused annual allowance figures.

    I have received a letter containing the following information. The letter also stated that they were not in position to calculate the 2017/18 figures.

    As at 31/03/17 my pension is calculated at 12,057 and lump sum is calculated at 21,921

    The letter went on to say that ....

    "my Pension Input Amount for 2016/17 was 16,493. This is beneath the annual allowance threshold of 40,000 allowing you to carry forward an amount of 23,506 into 2017/18"

    "You are also entitled to carry a further two years' worth of unused allowances in to 2017/18. These additional amounts are 32,511 (from 2015/16) and 26,818 (from 2014/15)" ...end of letter

    If I'm reading this correctly, I have 23,506 I can put into a SSIP this financial year as well as carried over amounts from 2015/16 and 2014/15 32,511 and 26,818 respectively.

    I'm surprised that I can carry forward previous years' unused allowances as it was my understanding that only Higher Rate tax payers have this privilege.

    My 2017/18 current gross salary is 30,153

    Any thoughts on the figures given to me?

    Edit.. I've re-read the letter and I wonder how my carry over allowance for 2015/16 is 32,511 when I don't even earn that amount?????
    Originally posted by scoot65
    In response to the above, Linton posted the following (Post #15) :-

    "There are two different limits calculated in two different ways. The calculation described refers to the 40K limit. If you earn less than 40K your gross pension contributions are limited by your earnings. You subtract your contribution to the DB scheme and any other pension contributions you make (gross). Multiply what is left by 0.8 amd that is the maximum net payment you can make to a SIPP. The 20% is added to your pension by HMRC.

    The 40K limit does have carry forward, the earnings limit doesnt."


    Using the information given to me in Linton's post I've calculated this:-

    Gross salary 30,153
    My contribution to the LGPS is 6.5%
    6.5% of 30,153 = 1959
    If I subtract my 6.5% contribution from my gross salary I have 28,193

    28,193 x 0.8 = 22,554

    So, looking at my figures and calculation above, am I right in thinking that I could contribute 22,554 into a SIPP this year?

    I'm still not sure regarding any carry forward amounts I could use from previous years....
    • zagfles
    • By zagfles 22nd Mar 18, 9:29 PM
    • 13,196 Posts
    • 11,203 Thanks
    zagfles
    OK, I'm back.....

    Just to recap here is the information I obtained from my pension admin (LGPS)



    In response to the above, Linton posted the following (Post #15) :-

    "There are two different limits calculated in two different ways. The calculation described refers to the 40K limit. If you earn less than 40K your gross pension contributions are limited by your earnings. You subtract your contribution to the DB scheme and any other pension contributions you make (gross). Multiply what is left by 0.8 amd that is the maximum net payment you can make to a SIPP. The 20% is added to your pension by HMRC.

    The 40K limit does have carry forward, the earnings limit doesnt."


    Using the information given to me in Linton's post I've calculated this:-

    Gross salary 30,153
    My contribution to the LGPS is 6.5%
    6.5% of 30,153 = 1959
    If I subtract my 6.5% contribution from my gross salary I have 28,193

    28,193 x 0.8 = 22,554

    So, looking at my figures and calculation above, am I right in thinking that I could contribute 22,554 into a SIPP this year?
    Originally posted by scoot65
    Yes.
    I'm still not sure regarding any carry forward amounts I could use from previous years....
    You need to understand that there are two completely separate limits at work. The annual allowance (the "40k limit") and the earned income limit. You have loads of annual allowance to carry forwards, so you can contribute loads without exceeding the annual allowance. But the earned income limit is a separate limit, and there is no carry forwards for this.
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