Yes. You can contribute more than your allowance as long as you do not exceed your UK earnings. For any contribution above your allowance, a tax charge known as the annual allowance charge will be applied and it will effectively cancel out the tax relief you receive over the allowance.
To understand your current allowance you should also consider any contributions that your employer makes for you, as these also use up your annual allowance.
The ‘Carry Forward’ rule permits individuals to contribute more to their SIPP than the £40,000 annual allowance and still benefit from tax relief, as long as they have any unused allowance in the last three tax years.
In order to use the benefits of the rule, you must have:
- Been a member of a pension scheme in each tax year from which you carry forward, even if you did not make any contributions.
- Used up your full annual allowance in the current tax year.
- Contributed less than £40,000 in one or more of the last three tax years. (This includes personal and employer contributions.)
- Earnings of at least the amount you are contributing in that tax year, if you are making personal contributions.
Need more information? Read our guide here.
