What is Carry Forward?

Carry Forward is a tax rule that allows you to catch up on your unused pension contributions.

It enables you to carry forward unused annual allowance from the previous three tax years to the current tax year.

3 points to bear in mind:

  • The standard annual allowance for the current tax year (2018/19) is £40,000.
  • You must earn at least the total amount you wish to contribute in this tax year.
  • That last point doesn’t apply if the contribution is being made by your employer (read this article).

Some of the times when people use carry forward:

  • They are earning more than £40,000 in the 2018/19 tax year and wish to pay a larger personal pension contribution.
  • Their employers want to make a large pension contribution for them.
  • They want to take advantage of higher rate tax relief in a good earnings year.

Other Important points about carry forward

  • you must have been a ‘member’ of a registered pension scheme at some point during the year you are carrying forward.
    (A ‘member’ can include a plan that you may no longer be contributing to).
  • You have to use up the current year’s annual allowance to use carry forward.
  • Unused allowance is used up starting with the earliest year first.
  • If you’ve taken benefits since 2015 you probably won’t be able to use carry forward (check it out because there are a few exceptions).


These posts are designed to be Snippets which means ‘a small and often interesting piece of news or information’. Because it is just a snippet, it is obviously NOT comprehensive or personal advice and you should NOT make decisions or take action based on reading just this article. This snippet is based on our current understanding of legislation and HMRC guidance which can change. If you are in any doubt whether a particular course of action is suitable for your circumstances, you should seek personal financial advice. Remember also, that tax rules can change and benefits depend on individual circumstances.  If you are unsure any reliefs are applicable to you, you should consult your accountant or HMRC.

  • Hillary Carden

    Hilary is a force to be reckoned with in the pensions field. She founded Cardens in 1993 and Cardens Pension Trustees Ltd in 1995 and became one of the first women to become a Registered Life Planner® and with 30+ years experience of advising on and managing pension schemes, she really is an expert in retirement and financial planning.

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