SIPP accounts are now live and are being gradually rolled out to clients on the waitlist. Eligible UK-resident clients of Trading 212 UK Ltd will be notified when access becomes available to them.
The carry forward rule allows you to pay more into your pension than the current year's annual allowance, by using any unused allowance from the three previous tax years. This can be particularly useful if you have varying income or want to make a larger one-off contribution.
How can I use the Carry Forward rule?
To use carry forward, you must first fully use your current tax year's annual allowance. Once that's done, you can then add any unused allowance from the three preceding tax years, starting with the earliest year.
📄 Note
Even when using carry forward, you can only receive tax relief on contributions up to 100% of your UK relevant earnings for the tax year in which the payment is made.
What are the Carry Forward rule's eligibility criteria?
The following eligibility criteria must be met to use the Carry Forward rule for pensions:
- Sufficient UK Relevant Earnings.
- Current Year's Allowance Used.
- Pension Scheme Membership.
When Carry Forward cannot be used?
In the following scenarios, the Carry Forward rule cannot be used:
- You do not have sufficient UK relevant earnings in the current tax year to cover the total contribution.
- You have not fully used your annual allowance for the current tax year.
- You are restricted by the Money Purchase Annual Allowance (MPAA).
- You were not a member of a UK registered pension scheme during the years for which you wish to carry forward unused allowance.