Reply to: Bringing forward unused pension contributions

[Lambert Simnel]

I had a Pension with HP for years which ended when I took VR in July 2015
Hard bit for me is finding out the previous years contributions.
I assume that will be the sum of mine plus theirs
I received a letter only a few days ago stating my 2015/16 Pension Input Amount (PIA) was circa £80 or so, that simply can't be right so I am somewhat befuddled!

Maybe asking how much I and HP paid into my pension was the wrong question!

Might be confusion due to the transitional rules which took affect in 2015/6, basically starting a new pension input period from 9th July 2015. Any pension contributions made up to that point were made part of a special period (still with limit of £40k but which I think you can't backdate contributions into). Aligning the pension input period to the tax year (required as part of the introduction of tapering relief when your package goes above £150k) meant that the principle pension input period for that year ran from 9th July 2015 to 5 April 2016.

So my guess is that your contributions more or less all fitted into that "special" input period up to 8th July 2015, and only a very limited amount was allocated to the full/second input period which you can use for backdating contributions into.

[DallasDad]

I had a Pension with HP for years which ended when I took VR in July 2015
Hard bit for me is finding out the previous years contributions.
I assume that will be the sum of mine plus theirs
I received a letter only a few days ago stating my 2015/16 Pension Input Amount (PIA) was circa £80 or so, that simply can't be right so I am somewhat befuddled!

Maybe asking how much I and HP paid into my pension was the wrong question!

[eastway]

You can use it in another scheme. (I've done this personally, as well as having talked about it with pension advisors)

Great - good to hear this from someone that's already done it

[Lambert Simnel]

I've had a bit of a google & not found anything concrete.. are you able to carry forward unused pension contributions and pay that into a different pension scheme?

Basically I have a company pension from when I was in permie land, this is just collecting dust as I've not made any contributions since leaving that job & has been in existence since about 2010. From my understanding if you've had a valid pension scheme in place you can make use of the "carry forward", but would I have to contribute to the already existing scheme, or could I set myself up a SIPP and make use of it that way?

Thanks

You can use it in another scheme. (I've done this personally, as well as having talked about it with pension advisors)

[eastway]

I've had a bit of a google & not found anything concrete.. are you able to carry forward unused pension contributions and pay that into a different pension scheme?

Basically I have a company pension from when I was in permie land, this is just collecting dust as I've not made any contributions since leaving that job & has been in existence since about 2010. From my understanding if you've had a valid pension scheme in place you can make use of the "carry forward", but would I have to contribute to the already existing scheme, or could I set myself up a SIPP and make use of it that way?

Thanks

[IR35 Avoider]

I agree that after using current year allowance, the oldest unfilled year is always next in line.

[fidot]

According to the pensions advisory service

"To use carry forward, you must make the maximum allowable contribution in the current tax year (£40,000 in 2016-17) and can then use unused annual allowances from the three previous tax years, starting with the tax year three years ago."

I'll double check with my SIPP provider.

Interesting. Thanks i'll check with my IFA too.

[Scrag Meister]

I paid in over the allowance a couple of years back.

I got a letter from the pension provider pointing this out to me, so I rung them but they said it was fine, they were just making me aware.

I'm planning on backfilling 15/16 as I was off for 8 months last year.

[Fred Bloggs]

Many thanks. My accountant commented that I could indeed carry forward the allowance, but could not advise on the process. Sounds like there isn't one, so that's nice and easy. I have much the same, so will do it this way. I understand you need to use the whole of 'this year's' allowance before you can use the carry forward.

Correct, you do. The chunk(s) above the GBP 40k then count against year 3 then 2 then 1 then current year. So it is a rolling three year carry forward scenario. For once, it is actually quite a straight forward thing to do, a rarity in itself these days.

[teapot418]

My understanding is that you use up the most recent years first, so the 20K in the above scenario goes into last year's allowance. Only if that takes the amount over 40K for that year (i.e. if you already had £25K in there), would the extra go into the pot for 2 years back.

According to the pensions advisory service

"To use carry forward, you must make the maximum allowable contribution in the current tax year (£40,000 in 2016-17) and can then use unused annual allowances from the three previous tax years, starting with the tax year three years ago."

I'll double check with my SIPP provider.

[fidot]

So if I put in, say, £60K this year, that would be this year's allowance, and an unused 20K from three years ago.

My understanding is that you use up the most recent years first, so the 20K in the above scenario goes into last year's allowance. Only if that takes the amount over 40K for that year (i.e. if you already had £25K in there), would the extra go into the pot for 2 years back.

[teapot418]

Good Teapot! They will be able to provide clarity on what allowances you can use though can't they?

They must be able to tell you what you can legally do though.

Yes, they confirmed I could do it. But not the 'how' which Fred Bloggs has kindly answered.

[teapot418]

Google is your friend, here are a couple to start you off:
https://www.tax.service.gov.uk/paac
https://www.pensionsadvisoryservice..../carry-forward

Thanks - I'd seen the PAS site - my question was really around the process - I was unsure if there was a form I needed to fill out, but it sounds like it's all straightforward.

[teapot418]

I asked the same questions myself from my SIPP provider. The answer is, there is nothing formal involved. You document it all yourself then file it away for a rainy day. For example - I took pdfs of my previous years of SIPP holdings and made a spreadsheet referencing the tax years and how much if any contributions I had made. I then showed a calculation each time I wanted to make a > GBP 40k contribution. For a couple of years running I put in GBP 80k and so far Bob is indeed by aunts husband. HTH.

Many thanks. My accountant commented that I could indeed carry forward the allowance, but could not advise on the process. Sounds like there isn't one, so that's nice and easy. I have much the same, so will do it this way. I understand you need to use the whole of 'this year's' allowance before you can use the carry forward.

[Fred Bloggs]

I asked the same questions myself from my SIPP provider. The answer is, there is nothing formal involved. You document it all yourself then file it away for a rainy day. For example - I took pdfs of my previous years of SIPP holdings and made a spreadsheet referencing the tax years and how much if any contributions I had made. I then showed a calculation each time I wanted to make a > GBP 40k contribution. For a couple of years running I put in GBP 80k and so far Bob is indeed by aunts husband. HTH.