It is not too early to start thinking about making a pension contribution for the 2018/19 tax year.
You can make use of any annual allowance that you may not have used in the previous three tax years, as long as you were a member of a registered pension scheme.
You can use this carry forward if you’re an active member currently building up pension benefits, a pensioner member in receipt of pension benefits from your pension scheme, a deferred member with paid-up pension benefits or a pension credit member that has a share of your ex-partner’s pension.
To use carry forward, you must make the maximum allowance contribution in the current tax year, which is £40,000, while a lower limit of £4,000 may apply if you have already started accessing your pension.
For high earners, the tapered annual allowance came into force as of 6 April 2016. For every £2 of income above £150,000 per annum, £1 of annual allowance will be lost. The maximum reduction will be £30,000 meaning that anyone earning over £210,000 will have their annual allowance capped at £10,000. An income floor will mean the taper will not apply unless the individual’s income excluding pension contributions exceeds £110,000.
The annual allowance applies across all of the schemes you belong too, meaning that it’s not on a per scheme limit, and it includes all of the contributions that you, your employer or anyone else pays on your behalf.
With six months of this tax year to go, it’s not too early to consider your contributions for this year, including any carry forward you have from the previous three tax years.