NHS Pension Carry Forward Guide

Complete guide to Carry Forward rules for NHS pension scheme members. Learn how to use unused Annual Allowance from previous years.

Last updated: 2025-01-15

All Resources

Carry Forward Tools & Guides

Carry Forward Calculator

Calculate your available unused allowances

Annual Allowance Guide

Understand the main allowance rules

Tax Planning Guide

Strategic pension tax planning

Carry Forward Timeline

Current Year (2025/26)

Use £60,000 allowance first (or tapered amount)

2022/23

Up to £40,000 unused allowance available

2021/22

Up to £40,000 unused allowance available

2020/21

Up to £40,000 unused allowance available

What is Carry Forward?

Carry Forward allows you to use any unused Annual Allowance from the previous three tax years. Key points:

•Standard Annual Allowance is £60,000 (2025/26)

•Can look back up to three tax years

•Must use current year's allowance first

•Must have been a member of a UK pension scheme in the year from which you wish to carry forward

•Particularly valuable for NHS staff with significant pension growth

This can help you make additional pension contributions or manage tax charges from high pension growth.

Source: https://www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

How to Calculate Unused Allowance

To calculate your unused Annual Allowance:

1. Current Year (2025/26):

• Start with £60,000 standard allowance

• Subtract pension growth for current year

• Must use current year's allowance first

2. Previous Three Years:

2022/23: Up to £40,000 available

2021/22: Up to £40,000 available

2020/21: Up to £40,000 available

Important Notes:

•Tapered Annual Allowance affects available amounts

•McCloud remedy choices may affect historical calculations

•Must have been in a pension scheme each year

Source: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm055100

Impact of Tapering

Tapered Annual Allowance affects Carry Forward calculations:

Historical Tapered Amounts:

2023/24:

•Threshold Income: £200,000

•Adjusted Income: £260,000

•Minimum allowance: £10,000

2020/21 to 2022/23:

•Threshold Income: £200,000

•Adjusted Income: £240,000

•Minimum allowance: £4,000

When calculating Carry Forward:

•Must use the tapered amount for each year if applicable

•Cannot carry forward more than the tapered amount

•Keep records of threshold and adjusted income calculations

Source: https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance

When to Use Carry Forward

Common scenarios for using Carry Forward:

1. Significant Pension Growth:

• Promotion or pay increase

• Additional sessions/overtime

• Multiple NHS roles

• Clinical Excellence Awards

2. Additional Contributions:

• Making up for career breaks

• Increasing retirement benefits

• Tax-efficient saving

3. Managing Tax Charges:

• Reducing or eliminating AA charges

• Planning for known pension growth

• Strategic retirement planning

Source: https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

Record Keeping

Essential records to maintain:

1. Annual Documents:

• Pension Savings Statements

• P60s and payslips

• Self-assessment returns

• Pension growth calculations

2. Historical Information:

• Previous years' allowances

• Tapered AA calculations

• Scheme Pays elections

• Pension input amounts

3. Supporting Evidence:

• Promotion letters

• Additional role contracts

• Clinical Excellence Awards

• Any correspondence with NHS Pensions

Source: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm167000

Record Keeping Essential

Carry Forward requires detailed record keeping of previous years' pension growth and allowances. Keep all Pension Savings Statements, P60s, and documentation of promotions or additional work that affects your pension growth.

Required Actions

Gather historical data

Collect pension statements and growth information for previous three years

Calculate unused allowances

Determine available carry forward from each qualifying year

Plan strategically

Use carry forward to manage expected pension growth or make additional contributions

Seek professional advice

Consider financial advice for complex carry forward situations

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