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pension contributions

Practical Issues
mutantpoodle
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pension contributions

#397457

Postby mutantpoodle » March 20th, 2021, 4:38 pm

if I want to put more into pension than company pays, I am allowed up to £40000 each year (sub salary)
once over that I can go back 3 years???
if I do that, is there a required order in which to use those 3 years
ie
if I do 60000 its 40000 this year and 20000 'last year' or can it be 2 years ago?

or put another way
I did it last year in full plus some
now want to do it again...but need to go back 2 years...or even 3 years

is that OK?/... or have I blown it

swill453
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Re: pension contributions

#397480

Postby swill453 » March 20th, 2021, 5:40 pm

I think you've possibly got it wrong. The most you can put in this year is your earnings this year. The £40K limit and previous years earnings/allowances are only relevant if you have earnings this year to cover it.

Scott.

JohnB
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Re: pension contributions

#397492

Postby JohnB » March 20th, 2021, 6:33 pm

You use this year first, then the oldest bit of allowance first. You are limited by this years "earnings", not income, of course.

mutantpoodle
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Re: pension contributions

#397501

Postby mutantpoodle » March 20th, 2021, 7:11 pm

*earnings*
So salary of say 60000 and bonus of 60000 is * earnings* 120000 ?

On that basis 40000 allowed for this year and add ? For last year...or the year before

Figs kept simple so I can understand replies

mark88man
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Re: pension contributions

#397504

Postby mark88man » March 20th, 2021, 7:15 pm

salary and bonus are earnings

You use this years first, then use up the allowance from the oldest year, until there is none left.

I have seen some on line forms doing the calculation, but I am close to max each year so not really been bothered as not lots left over, although interested as my final year (in a few years) will be spent squeezing the pips

be careful as your examples are close to the point where your personal allowance shrinks (although pension contributions will undo that) but there is a point where your annual allowance tapers as well

DrBunsenHoneydew
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Re: pension contributions

#397510

Postby DrBunsenHoneydew » March 20th, 2021, 7:32 pm

Use this year's £40k 2020-21 first
Then whatever remains unused from 2017-18
Then whatever remains unused from 2018-19
Then whatever remains unused from 2019-20

mutantpoodle
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Re: pension contributions

#397584

Postby mutantpoodle » March 21st, 2021, 8:38 am

many many thanks
I am starting to get a grasp

sadly this is not for me, its my son who has such problems to overcome
(my pensions are taken care of by PPF...so pathetic...but better than nothing!)

he will be over limits re allowance but his/our first issue was which years we go back to
now sorted
thanks all again


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