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I am 54 years old and self employed. My earnings have been

Resolved Question:

I am 54 years old and self employed. My earnings have been a steady £20,000 per year for a number of years. I have also paid £6,000 per year in to a personal pension for many years.
I will have an endowment policy mature this year of about £50,000.
What I would like to do is top up my pension using this. Obviously I can put £14,000 in this year (£11,200 + £2,800 tax relief).
Is it possible to use my unused tax allowances from previous years to further boost my pension pot?
If so how much and for how many years can you go back?
Thanks - Brian
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.

Hi Brian

Thanks for your question. I am Sam and I am one of the UK tax experts here on Just Answer.

You can pay up to a maximum of £40,000 into your pension, any more than a tax charge arises on the excess, however, to offset this you can carry forward unused allowances from the past 3 years #To make this easy for you HMRC have a calculator that works out for you, what amount is available for you to pay in addition to your current annual amount - which will accurately advise this for you, you just need to put in the information asked for.

Link here for this calculator http://www.hmrc.gov.uk/tools/pension-allowance/

This is the calculator you will need http://www.hmrc.gov.uk/tools/pension-allowance/standardcalculator.htm

And results are

The standard pension savings annual allowance calculator results <div class="noscript"> The calculator uses Javascript. Either your browser does not support Javascript or you have turned off its scripting capability. To use the calculator, please either: <ul> <li>Install a Javascript-capable browser, or</li> <li>Turn scripting on in your browser options. </li> </ul> <p>You may wish to visit <a href="http://www.hmrc.gov.uk/index.htm">Content area</a> instead</p> </div>

Tax YearPension Input AmountAmount Exceeding the AAAvailable Annual Allowance (Incl. Carry Fwd)Contributions Liable to a Tax ChargeUnused AA Carried Forward to Next YearCumulative Carry Forward
11/12£6000£0£50000£0£44000£44000
12/13£6000£0£94000£0£44000£88000
13/14£6000£0£138000£0£44000£132000
14/15£6000£0£172000£0£0£166000

So you have an unused carry forward figure of £166000 - more than sufficient for the contribution you wish to make

Thanks

Sam

Customer: replied 2 years ago.
Sorry for been late in replying back but it's been a bank holiday and haven't been around.
Just one more quick question regarding your reply, does this mean I would get tax relief on any amount I put in up to the £166,000? .
I.e if I put £80,000 in would I get £20,000 added to this amount from the inland revenue?
Bear in mind I have not paid that amount of tax in during the past four years
Thanks - Brian
Expert:  Sam replied 2 years ago.

Hi Brian

Thanks for your response.

Despite you having unused carry forward of pension relief, which can be added to the current annual allowance, you are going to be restricted to the fact that you annual income is only £20,000 so you can only contribute a maximum of 100% of your annual income - which in your case is £20,000

Thanks

Sam

Sam, Accountant
Category: Tax
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