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 and next tax year (2019/20 & 2020/21) is £40,000.
  • Your earned income must be at least the total amount you wish to make personal contributions in this tax year.
  • That last point doesn’t apply if the contribution is being made by your company (read this article).

Some of the times when people use Carry Forward:

  • They are earning more than £40,000 in the 2019/20 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.
  • Then, unused allowance is used up starting with the earliest year first.
  • If you’ve taken pension benefits since 2015 you won’t be able to use carry forward except if you meet certain conditions. Check this out here


Call 0117 290 0370 if you’d like to find out more about how we work with business owners. Ask to book a free 20 minutes telephone consultation with Hilary Carden.

Alternatively drop us an email to:  enquiries@cardens.co.uk

More Reading:

Dividends and Pensions

What is the tapered annual allowance?

Important Risk Warnings:

This article and the information on this website is not personal advice. It’s only intended to give you a brief summary or highlight a particular issue for you to investigate further. It is based on our current understanding of legislation and HMRC guidance which can change. Correct as at April 2019. If you’re in any doubt whether a particular course of action is suitable for your circumstances, you should seek professional advice. Tax rules can change and any benefits depend on individual circumstances. And, if you are unsure any reliefs are applicable to you, you should consult your accountant or HMRC.

The value of investments and any income from them can fall as well as rise, so you could get back less that you put in. Past performance is not a guide to the future. It cannot provide a guarantee of the future returns of a fund.

  • 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.

    Join her online: