Q. It seems that NHS / Private dentists can easily fall foul of the new annual pension allowance. It is interesting to know that if the £50,000 annual limit is breached we can use up unused allowance from the previous 3 years.
In the light of this, can you please advise if we can use up any of our unused allowance from the £255,000 pots from the last three years?
A. Unfortunately, the new rules for carrying forward unused allowances initially use a “notional” annual allowance for the years 2008/09, 2009/10 and 2010/11 of £50,000.
That is they assume that the new, reduced annual allowance has been in place for those years.
From these notional allowances are deducted the actual contributions in those years. In the case of defined benefit schemes, such as the NHS Pension Scheme, these are calculated using the new basis applying a factor of 16 to pension accrual over increases in CPI for the September prior to the year in question.
The relevant figures for each year are:
-
2008/09 1.9%
-
2009/10 5.2%
-
2010/11 1.1%
-
2011/12 3.1%
You must use the current year first.
I hope this helps with your query.
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