annuity?

You can buy a PLA (Purchased Life Annuity) at any time - this would pay out more than your "pension" (termed Compulsory Purchase Annuity) annuity, as a part of a PLA is regarded as a return of capital and not subject to tax. Whether that is a wise option (probably unlikely) is another matter.

Alternatively, you may have unused pension relief from earlier years which could enable you to make further premiums to your current policy (or a new policy)? Again, not necessarily a good option, even if you can.

Up to age 75 you can also go for an immediate-vesting personal pension. Put in at least 3600 a year (more if you have qualifying income), get tax relief at your marginal rate (or basic rate even if you pay no tax), take

25% of it back tax free immediately, and use the rest to buy an annuity - which is of course taxable, but you still come out ahead because of the tax-free lump sum.

This works pretty well for a 40% tax payer.

It also works for a 22% tax payer, but as spectauclarly well. But either way you can't "take the 25% back immediately" unless you're over 50.

Sorry, folks, that was meant to read "but not as spectacularly well".

Missing "not" allowed for. :)

Or if the individual is permanently incapacitated, or in an occupation which usually has an earlier retirement date (e.g. professional footballers etc).

How far back can you go with using up unused pension allowance? I joined our company pension scheme in Jan 2002 but before that I had two years of not puting any money into a pension. I have a personal pension scheme which I contributed to while I was contracting but stopped puting money into it around Dec 1999. So could I use the allowance from Jan 2001 to Jan 2003 to top up the personal pension.

Whether I do this is another matter but I was just curious having read your comment.

Thanks Andy

You can carry back to the last tax year, but only upto the following

31st January, i.e. 01/02 tax year contributions can be made upto 31 January 2003, 02/03 tax year, you can carry back upto January 04.

Paul.

Paul.

True, but the OP said something like "can you enhance an annuity when you draw a pension" so the implication is that he is indeed old enough. (Also the age limit is going up to 55 - watch the budget, there will probably be some quite big changes to pension rules.)

If the proposed rule changes happen this will all go, there will just be a total cap on the fund size but no limits (or only weak ones) to annual contributions.