Personal Pensions

[stwstrz123]

When I was an Insurance broker 20 years ago, there was a provision for `using up` unused tax allowances for the previous 6 years (7 including the current one) to buy a single premium policy. The idea being that you would match the tax paid in those years with a similar amount to increase your retirement fund. Has this changed or what are the current rules? Any ideas please?

[EDDIE51]

All I know is that pension rules have just changed this month.

[fiction-factory]

I am not sure I understand this- if you had unused tax allowances in those years I'm not sure why you'd have paid tax in those years.

Anyway, I vaguely recall there was some provision for going back 3 years not 5 but not for new pensions- only for adding to existing policies.But I think the rules might have changed as Eddie says otherwise it's just another way someone could shove a load of money in, claim loads of tax relief, and then withdraw a big chunk tax free a few days later

[stwstrz123]

Yes, I know pension rules have changed this month and one can currently go back 3 years for income tax relief (but only if you pay 45% tax, if I understand it correctly).

The reference to `tax allowances` in this instance refer to the a portion of one`s income that can be paid into a pension plan, as I said, one could go back a total of 7 years to utilize this `allowance` (if you could not afford to use the allowance in recent years gone by).

I would like to know if this has changed, and when. I tried two leading insurance companies, with no success, and can only assume that either the staff are too young to remember the situation as it was and therefore have not heard of it, or it does not apply any longer.

The rules used to say that unused allowances for previous years could be utilized

[ubasses]

Is this any help
https://www.gov.uk/tax-on-your-private-pension/annual-allowance

[fiction-factory]

That seems a good link, ubasses. It confirms what I thought about the figure being only 3 years- and also that the OP is referring to unused annual allowances for getting tax relief on contributions rather than unused tax allowances

[stwstrz123]

Yes, thanks for that, the rules have obviously changed over the years, but this article clarifies the situation.