If you don’t manage to get your pension in time for the end of the tax year, don’t worry. With pensions the rules are quite different to ISAs in the sense that you may be able to carry forward your allowance for the tax year.
Carry forward allows you to make use of any annual allowance that you may not have used during the three previous tax years, provided that you were a member of a registered pension scheme.
To use carry forward, you must make the maximum allowable contribution in the current tax year and can then use unused annual allowances from the three previous tax years, starting with the tax year three years ago.
You will only get tax relief on your earnings in the tax year in which you make the payment, and you only receive higher rate tax relief to the extent that you have paid it.
For more information on whether you are eligible it may be worth consulting a tax adviser. You can also find more information on the carry forward rules at the pension advisory service.
If you have any questions relating to this please do get in touch with us.
From the beginning of the tax year 2016/17 if your adjusted income is over £150,000 your pension annual allowance will be reduced. It won't be reduced if your threshold income for that tax year is £110,000 or less, no matter what your adjusted income is.
If this rule applies to you for every £2 your adjusted income goes over £150,000, your annual allowance for that year drops by £1. The drop is limited so that the minimum tapered annual allowance you can have is £10,000.
For more information in general about pension tapering please refer to the HMRC website HMRC Pension schemes: work out your tapered annual allowance