SIPP

[dubaidancer]

Hello,

I have a question regarding SIPP, if anyone is kind enough to help. My SIPP is with Vanguard.

I was informed by vanguard that I'm able to carry forward any unused allowance from the previous 3 tax years on the basis I held a pension scheme within those years and earned the relevant income for the total amount being contributed.

I was in a pension scheme up until April 2020. How much can I invest in my SIPP, and do I just add the money as normal?

Thanks if anyone can help.

Your income this year needs to be enough to cover all payments, so that means it has to cover £40k this year, plus any carry forward you use.

2021/22 this tax year - I assume you have already paid in £32,000... thus with tax relief at source you are up to the £40k.
2018/19 tax year - as long as you were in a pension scheme in this year, any unused allowance from this year is used up next.
Then 2019/20 tax year leftover allowance and then 2020/21 tax year.
You mention being in a pension scheme up until April 2020... what happened then? In April 2020-March 2021 were you in a pension scheme?

Thank you so much for your reply. Not sure I fully understand the carry forward.

Actually, I think I made a mistake. I stopped paying into the pension scheme in April 2020 (Teachers Pension Scheme) because I moved abroad and therefore no longer could. I think I need to check if I ceased being a member then, or if I just stopped making payments then.

From an email I received, looks like I am referred to as a deferred member of the scheme.

Re carry forward.

In the UK, there are two constraints on how much you can contribute to your pension.

1. Up to 100% income in that year

1. Maximum £40,000 per year.

If you have contributed less than £40,000 in each of the last three years, the unused amount can be carried forward to increase contributions in the current year, so long as your increased contribution is less than it equal to you income

Are you back in the UK OP?