Annual Allowance Calculator 2014 15

The Annual Allowance is a key concept in UK pension taxation that limits how much you can contribute to your pension each year. For the 2014-15 tax year, the Annual Allowance was £40,000, but this could be reduced if you had pension income in previous years.

What is the Annual Allowance?

The Annual Allowance is the maximum amount you can contribute to your pension in a tax year without it being subject to additional tax. For most people, this was £40,000 in the 2014-15 tax year (6 April 2014 to 5 April 2015).

The Annual Allowance applies to both personal and employer contributions to your pension.

How the Annual Allowance Works

The allowance is reduced if you have pension income in previous years. The reduction is calculated based on your Adjusted Income, which includes your total income and any pension income from previous years.

Key Points About the Annual Allowance

Maximum allowance for 2014-15: £40,000
Reduced if you have pension income in previous years
Applies to both personal and employer contributions
Can be carried forward unused allowance to future years

How to Use This Calculator

Our Annual Allowance Calculator helps you determine your available allowance for the 2014-15 tax year. Simply enter your total income and any pension income from previous years, then click "Calculate" to see your available allowance.

Input Fields Explained

Total Income: Your total income for the 2014-15 tax year
Pension Income from Previous Years: Any pension income you received in the 2013-14 tax year or earlier

What the Calculator Shows

The calculator will display your available Annual Allowance after accounting for any reductions due to pension income from previous years. It will also show you how much of your allowance has been used up by your contributions.

Formula and Calculation

The calculation of the Annual Allowance for 2014-15 follows these steps:

Adjusted Income = Total Income + Pension Income from Previous Years

Annual Allowance = £40,000 - (Adjusted Income - £40,000) * 0.5

(Only if Adjusted Income > £40,000)

If your Adjusted Income is £40,000 or less, you get the full £40,000 Annual Allowance. If it's more than £40,000, the allowance is reduced by 50% of the amount over £40,000.

Assumptions

All figures are in GBP (£)
Tax year runs from 6 April to 5 April
Pension income from previous years is from the 2013-14 tax year or earlier

Example Calculation

Let's say you have:

Total Income: £50,000
Pension Income from Previous Years: £10,000

Calculation steps:

Adjusted Income = £50,000 + £10,000 = £60,000
Amount over £40,000 = £60,000 - £40,000 = £20,000
Reduction = £20,000 * 0.5 = £10,000
Annual Allowance = £40,000 - £10,000 = £30,000

So your available Annual Allowance would be £30,000 in this example.

Comparison Table

Scenario	Total Income	Pension Income	Annual Allowance
Low income	£30,000	£0	£40,000
Medium income	£50,000	£10,000	£30,000
High income	£80,000	£20,000	£20,000

Frequently Asked Questions

What was the maximum Annual Allowance for 2014-15?

The maximum Annual Allowance for 2014-15 was £40,000, but this could be reduced if you had pension income in previous years.

How is the Annual Allowance reduced?

The allowance is reduced by 50% of the amount by which your Adjusted Income (total income plus pension income from previous years) exceeds £40,000.

Can I carry forward unused Annual Allowance?

Yes, you can carry forward any unused Annual Allowance to future years, but there are limits to how much can be carried forward.

Does the Annual Allowance apply to employer contributions?

Yes, the Annual Allowance applies to both personal and employer contributions to your pension.