Planning for your retirement can be both exciting and daunting.

It’s essential to structure your finances to make sure you have enough money for when you eventually retire.

To give your pension pot a boost, one option to consider is to take advantage of the ‘carry forward’ rules.

Pension carry forward allows you to make pension contributions over the annual allowance and still receive tax relief.

In the current tax year you can contribute up to *£40,000 to your pension and potentially carry forward any unused allowance from the previous three years.

This means, that you may be able to make additional contributions to your pension, over and above the annual allowance and still receive tax relief.

This can be very beneficial for individuals who.

  • Have received a large salary increase or bonus
  • Have surplus profits in their business
  • Have been made redundant
  • Are nearing retirement

*This means you could make an additional contribution of up to £120,000 !

The Rules

The carry forward rules were introduced in 6 April 2011.

  • You must have maximum funded in the current tax year
  • You must have been a member of a UK registered pension scheme at some point in that tax year you are carrying allowance forward from.
  • You must use any unused annual allowance from the earliest year first
  • You may not have full allowance available if you are subject to Tapered Annual Allowance

The tapered annual allowance

A new tapered annual allowance came into force for high earners on 6 April 2016 and affects how much pension tax relief they can claim. If your adjusted income (your income plus pension contributions) is over £240,000 your annual pension allowance is reduced.

For every £2 of income you earn above £240,000 a year, you’ll lose £1 of your annual allowance. The maximum reduction is £36,000 meaning that anyone earning over £312,000 will have their annual allowance capped at £4,000.




Professional Advice 

For individuals who are high earners, the opportunity to sweep up unused allowances from previous tax years may be a welcome retirement funding opportunity.

Let us help you build a tax-efficient income for a great retirement.

To find out more, please contact us.

I have been providing financial advice for over 30 years and if you haven’t reviewed your investments and pensions for a while,  now might be an ideal time to do this.

To start a conversation about your money and how we could help you – book your initial consultation  HERE

You can contact the office on 01564 732770 or use the links below.


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