Making the most of the pension annual allowance

People carrying forward any unused pensions allowance from the 2013/14 tax year must do so before 6 April 2017.

The current annual allowance for pension contributions is £40,000. In most cases contributions above this do not receive tax relief.

People can top up their contributions for the current tax year with any unused allowance from the previous 3 tax years.

The annual allowance was £50,000 between 6 April 2011 and 5 April 2015.

Any unused allowance from the 2013/14 tax year must be carried forward before the new tax year on 6 April 2017. After this date any unused allowance will be lost.

According HMRC, 3,900 people reported that they had saved more than the annual allowance in 2012/13. This increased by 79% to 7,000 people in 2014/15. 

Steve Webb, policy director at Royal London, said:

“Savers have just a few weeks to use up spare allowances from 2013/14. It is worth anyone in this position finding out urgently how much they have spare from earlier years”.

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