SIPP FAQs

You might be able to carry forward any unused allowance from the three previous years, into the current tax year. That’s up to £40,000 from each year.

Including the current tax year, that could mean you are able to make a pension contribution of up to £160,000 and receive tax relief.

If you earn over £150,000, the amount you can invest is subject to ‘adjusted income’. How much you can invest is tapered, so for every £2 above £150,000 the annual allowance is reduced by £1.

This means if you earn more than £210,000 a year (£60,000 over the threshold), the most you can pay into your SIPP each year then reduces by £30,000 to just £10,000.

The right to ‘carry forward’ any unused allowance can be useful for higher earners affected by the tapered annual allowance introduced in April 2016. With carry forward you could contribute up to three years and still benefit from the government’s tax relief.

The amount you can pay into a personal pension each year is limited by your earnings. If you are a UK resident under the age of 75, you can contribute up to £2,880, whether you are working or not, and with tax relief at 20%, the total contribution will be £3,600.