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HMRC internal manual

Pensions Tax Manual

Annual Allowance: essential principles: information to member

Glossary PTM000001
   

 

Information provided automatically
Information provided on request
Estimating pension inputs if the scheme administrator has not provided information about pension inputs by the Self Assessment return filing date

Information provided automatically

The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567

Pension savings statements

A scheme administrator must give certain individuals information about their pension input amounts under the scheme automatically. This information is called a pension savings statement. A scheme administrator must provide a pension savings statement automatically if:

  • the individual has been an active member (or, in certain circumstances, a deferred member) for all or part of the pension input period ending in the tax year, and

either:

  • the individual’s pension input amounts under the scheme are

    • for tax year 2015-16, more than £80,000 for the year overall or more than £40,000 for the post-alignment tax year (see PTM167100),
    • for other tax years, more than the annual allowance amount in section 228 Finance Act 2004 (for example, £40,000 for tax year 2016-17), i.e. the tapered annual allowance is ignored,

or:

  • the scheme administrator believes the individual has flexibly accessed a money purchase arrangement and their money purchase pension input amounts under the scheme

    • for tax years 2015-16 and 2016-17 respectively, are more than £10,000
    • for tax years 2017-18 onwards, are more than £4,000. 

This information should be given to the individual by 6 October following the end of the relevant tax year. For 2011-12 the scheme administrator had until 6 October 2013 to provide the information.

Also, the scheme administrator must inform HMRC that the pension savings statement has been issued to the individual. This requirement applies in respect of pension savings statements which are issued in respect of tax years 2013-14 onwards.

The flexibly accessing a money purchase arrangement and money purchase pension input amount requirement applies for tax year 2015-16 onwards.

PTM167000 onwards gives more information about this requirement including:

  • what information should be provided automatically
  • how, and
  • what happens if the scheme administrator does not have the information they need to meet the requirement.

Statements about flexibly accessing a money purchase arrangement

The information requirements described under this heading have application for tax year 2015-16 onwards.

An individual flexibly accessing a money purchase arrangement for the first time triggers a number of actual and possible information flows.

Scheme Administrator

The scheme administrator of the scheme which is flexibly accessed must:

  • within 31 days of the date of flexible access, inform the individual of the fact of the flexible access and what the individual must do.

Note: the scheme administrator does not have to do this if they have already been informed (by the individual or another scheme administrator) that the individual has previously flexibly accessed under another pension scheme.

If a scheme administrator is aware that an individual has flexibly accessed and the individual transfers to another scheme, the transferring scheme administrator must inform the receiving scheme of their awareness. They must do so within 31 days of the transfer or within 31 days of becoming aware of the flexible access (if later).

Individuals

Individuals must give information to other pension schemes that they are an active member of.  Note that individuals do not have to give such information to schemes they are deferred or pensioner members of.  

An individual must inform scheme administrators of those other pension schemes that they have flexibly accessed a money purchase arrangement.  They must do so within 91 days of receiving a flexible access statement or within 91 days of becoming an active member (if later).

However, the individual does not have to inform other schemes:

  • they became an active member of due to a transfer after the date of the flexible access
  • that provide only defined benefits for the individual.

Also, in the absence of receiving a flexible access statement, an individual treated as flexibly accessing a money purchase arrangement

  • as a consequence of qualifying for flexible drawdown prior to 6 April 2015, or
  • where a drawdown fund is converted for flexible access

must inform other pension schemes in the same way as described immediately above. For this purpose the 91 day reporting period runs from 6 April 2015 or the date of conversion (as appropriate) or in both cases, the date of becoming an active member of the other pension scheme (if later).

PTM166000 onwards gives more information about these requirements.

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Information provided on request

If an individual will not get a pension savings statement automatically they can ask their scheme administrator for details of their pension input amounts under the scheme. If the request is in writing the scheme administrator should provide the information within the later of:

  • three months of the scheme administrator receiving the request, and
  • 6 October following the end of the relevant tax year.

For details to work out liability to the annual allowance charge for 2011-12 the scheme administrator had until 6 October 2013 to provide the requested information.

In certain circumstances the deadline for giving the pension savings statement to the individual is extended. This can occur when the scheme administrator has not yet received requested information that the scheme administrator needs to prepare the requested pension savings statement.

PTM167300 gives full guidance about requesting information from the scheme administrator.

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Estimating pension inputs if the scheme administrator has not provided information about pension inputs by the Self Assessment return filing date

An individual must record liability to the annual allowance charge on their Self Assessment return. However, the individual may not have information from their scheme administrator about their pension inputs. This could be because:

  • the scheme administrator has not provided an automatic pension savings statement when required
  • the individual has not asked the scheme administrator for the information in time, or
  • the scheme administrator does not have the information needed to enable them to calculate the pension input amount for the individual under their scheme. For example, the scheme administrator may need information that originates from the individual or their employer to calculate the pension input amount.

Where this happens the individual must estimate their liability to the annual allowance charge based on available information. Possible sources of information are:

  • for an other money purchase arrangement the pension scheme should send members a statement each year to show the contributions that have been added to their pension arrangement (though this statement may cover a period that is different from the pension input period)
  • for a defined benefits arrangement the scheme may send members an annual statement giving an estimate of what their benefits will be (but members should be careful to check that the statement is an appropriate starting point for the estimated pension input amount tax calculation)
  • an individual’s pay statement may show their pensionable pay figure as well as any pension contributions deducted from their pay.

On joining the pension scheme members should have been given information about how their benefits build up and are calculated. If an individual has lost this information they can ask their scheme administrator how their benefits are calculated as well as what their pension input period is.

Using the information from the member’s booklet and other sources of information individuals should be able to estimate their pension input amounts.

Guidance starts at PTM053000 on how to calculate pension input amounts for each type of pension arrangement.