A pension input period (PIP) is an amount of time over which you measure how much you’ve saved into your pension. You may have different PIPs for each pension you have. Her Majesty’s Revenue & Customs (HMRC) use PIPs to determine in which tax year your contributions are treated for tax purposes. A PIP will usually start when the first payment is received and will end on the anniversary of the start date unless the member or scheme administrator takes action to end it earlier. PIPs can’t go on for longer than 12 months.
The default PIP for the following Legal & General pensions is 6 April to 5 April and has run from
6 April 2006. This date was automatically allocated when the first payment was received. You can choose your own PIP, to do this please see the question ‘Can I choose my own pension input period?’ below.
You may have joined one of the above pensions as an individual or as part of a group arrangement through your employer.
For older pensions the PIP will be based on the date the first contribution was received after
5 April 2006. For example if you first contributed on 1 July 2010 the PIP would have ended on
30 June 2011, which covered two tax years. Examples of our older pensions are:
If you’re a member of a Legal & General pension that is not listed above, the PIP will have been set by the scheme trustee not us – please contact your employer if you require this information.
If you have a pension with another provider, you may have a different PIP for these schemes.
Yes, you can choose your own PIP. For example if you started your PIP on 1 August 2012 you could ask for it to end on any date up to 31 July 2013.
Each pension can only have one PIP ending in any tax year. For example, if your PIP started on
1 February 2012 and you selected 31 December 2012 for it to end, the next PIP year would start
1 January 2013 and would have to end after 5 April 2013 to be in the next tax year.
You must tell us if you wish to choose your own PIP.
Your personally selected PIP will be used.
If you’re already using the tax year for your tax return then you don’t need to do anything. However, if your PIP is not based on the tax year you should check that you’re paying the correct amount of tax.
You should contact HMRC and ask for your tax returns to be retrospectively adjusted.
You’ll be liable to pay any Annual Allowance charge that arises as a result of the change in the PIP. You’ll be able to reclaim any overpaid tax that may arise as a result of the change. A repayment claim can be made up to four years after the end of the tax year in which the over payment arose.
The Annual Allowance for the tax year 2013/2014 is £50,000. It takes into account gross contributions paid by you and any contributions paid by your employer or third parties into any registered pension scheme. In the case of final salary schemes, contribution is defined as the increase in the value of benefits for active members.
If the total contributions to all of your pensions add up to more than the Annual Allowance for that PIP, you will have to pay a tax charge on the amount paid above the Annual Allowance. The Annual Allowance will not apply in the tax year in which you die or if you take your benefits on the grounds of serious ill health.
Where the total of the contributions to all of your registered pension schemes exceeds the Annual Allowance in a PIP, unused allowances from up to three previous tax years may be available. The Annual Allowance for each of the three tax years before the tax year 2013/2014 is assumed to be £50,000 for this purpose. To be able to do this you must have been a member of a registered pension scheme in the tax year(s) from which you wish to make use of any unused allowance. If you think this may affect you please contact your adviser.
For more information on PIPs please see HM Revenue & Customs pensions website.