What is ‘Carry Forward’?

What is ‘Carry Forward’?

Taking advantage of your unused pension allowance from the previous three tax years is a great way to maximize your pension savings and tax allowances. So, once this year’s annual allowance is gone, it is still possible to boost your retirement fund and save tax by contributing to it from the last three years, then two years ago, and then the previous year.


For example, you earn £150,000 in 2021/2022 – (like previous years)

2020/2021 £40,000 allowance, and only £10,000 used = £30,000 available

2019/2020 £40,000 allowance, and only £10,000 used = £30,000 available

2018/2019 £40,000 allowance, and only £8,000 used = £32,000 available.

REMEMBER to start from the third-year past to maximise allowance in more recent years.


What are the benefits to utilising Carry Forward as a higher/additional rate taxpayer?

  • 20% tax relief on contributions
  • Reclaiming the extra 20/25% from a higher rate tax threshold.
  • Regaining Personal Income Allowance (the first £12,570 taxed at zero that is lost after earnings exceed £125,140)

Have you taken advantage of your unused pension allowance from the previous three tax years?

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

Taxation rules can change at any time and are dependent on individual circumstances.

Any tax relief over the basic rate is claimed via your annual tax return.

Eight Wealth Management Ltd is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority). The 'St. James's Place Partnership' and the titles 'Partner' and 'Partner Practice' are marketing terms used to describe St. James's Place representatives.

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