Annual Allowance

Annual allowance (AA) is the amount by which a member’s pension, their Pension Input Amount (PIA), can grow in a Pension Input Period (PIP). All members are assessed annually and where the growth of a member’s PIA in a PIP is greater than the AA available to the member, they may be subject to a tax charge on the excess. Any charges along with payment options are provided to members via a Pension Saving Statement (PSS).

As a result of Transitional Protection, benefits accrued in the remedy period (1 April 2015 to 31 March 2022) are being ‘rolled back’ from career average to final salary on 1 October 2023. Due to rollback, the deadline has been extended to provide those affected with a PSS for the 2022/23 tax year PIP.

Pension Savings Statements

If you’re a protected member, you’ll receive your 2022/23 tax year PSS (if you’re due one) as usual by 6 October 2023. This is because when rollback occurs on 1 October 2023, your service won’t change as you were already in final salary for the remedy period. If you make an alternative choice for remedy period service, this could affect your AA position in the year you make your choice.

If you’re a tapered or unprotected member, you’ll receive your PSS by 6 October 2024 on account of rollback.

A PSS covering the remedy period tax years will be issued to affected active and deferred members by 6 October 2024, if the PIAs change for remedy period years. Retired members affected will receive their PSS six months after their Immediate Choice election or six months after the end of the election period if no choice is made. You’ll need to reassess your Annual Allowance position.

If, as a result of the PIA amendments relating to the remedy period you owe an additional AA charge for a relevant tax year (2019/20, 2020/21, 2021/22 and 2022/23), and don’t wish to pay this yourself, you can request that we pay this via ‘Scheme Pays’.

For more information about Annual Allowance, please visit the bespoke pages.

Scheme Pays

Any adjustment to Scheme Pays elections for remedy period years will need to be made by completing the Scheme Pays election form once the Scheme has issued your revised PSS.

If you didn’t have a Scheme Pays election, but because of the remedy are now subject to one, you’ll have until 6 July 2025 (or 6 July 2027 if you’re a retired member) to submit a request. You can still elect for scheme pays after these deadlines; however, this will be paid under the Scheme’s voluntary scheme pays facility.

For more information about scheme pays, please read our factsheet (PDF, 92 KB) (This link opens in a new window).

HMRC's Digital Service

A small number of members’ pension tax position in remedy period years may be affected due to ‘rollback’.

HMRC has introduced a calculator and interactive guidance, to help you identify whether you’re affected and need to take any action. If you were:

  • a ‘protected member’ joining the career average scheme for the first time from 1 April 2022, you’ll not have your service ‘rolled back’ and your previous Pension Input Amounts won’t be revisited. However, your Annual Allowance will be affected in the tax year that you make your choice if you choose career average benefits for the remedy period, following receipt of your ‘Remediable Service Statement’
  • a ‘tapered’ and ‘unprotected’ member, you’ll see a change in your Pension Input Amounts for some or all of the remedy period tax years.

If you’ve any new annual allowance charges or changes to your annual allowance charges, due to rollback, you can use the service to calculate:

  • If you’ve previously overpaid annual allowance charges for tax years 2019/20 to 2021/22, and how to apply for a refund
  • If you’ve previously overpaid annual allowance charges for tax years 2015/16 to 2018/19, and how to apply for compensation
  • If you’ve underpaid annual allowance charges for tax years 2019/20 to 2021/22, and how to make payment

If you’re a tapered or unprotected member, the deadline for the Scheme issuing you with a combined Pension Savings Statements for the remedy period is 6 October 2024.

Once you receive your combined Pension Savings Statements, you’ll be able to input your previous and revised Pension Input Amount into HMRC’s calculator (This link opens in a new window) for the relevant tax years in the remedy period.

Last Updated: 24/10/2023 12:10


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