By Chris James

Most of us know about some or all the great reasons and benefits of saving into a pension:

  • Securing your financial future
  • Having the freedom to choose when you will retire rather than being reliant on the state pension age (which as we know keeps increasing)
  • That the taxman will add to your own contribution (20%, 40% or 45% depending on your tax rate)
  • Getting your employer to pay on your behalf (plus saving in National Insurance if done via salary sacrificePotential for long term capital growth
  • Potential to regain your personal allowance if your income is over £100,000
  • Some of us may not know the potential of how much we can actually contribute into our pension.

Each year we all get an annual allowance of £60,000 (subject to tapering for higher earners) which can be funded by you and/or your employer.

However, if you haven’t used up all your allowances from the previous 3 tax years, you might be able to carry this forward and pay more now.

The allowance is lost if not used, so in this 2024/2025 tax year if you don’t use any missed pension allowance from 2021/2022, you will lose it, including any tax relief you are able to receive on top of this!

If you want to discuss this in more detail, please contact the team at Wealth Matters so we can check if you need to use your carry forward!