Home

  • CII Exams
    • AF Exams
    • CII AF1 Personal Tax and Trust Planning
    • CII AF4 Investment Planning
    • CII AF5 Financial Planning Process
    • CII AF7 Pension Transfers
    • CF Exams
    • CII CF1 UK Financial Services, Regulation and Ethics
    • CII CF6 Mortgage Advice
    • CII CF8 Long Term Care Insurance
    • ER Exams
    • CII ER1 Equity Release
    • FA Exams
    • CII FA1 Life Office Administration
    • CII FA2 Pensions Administration
    • IF Exams
    • CII IF1 Insurance Legal and Regulatory
    • CII IF2 General Insurance Business
    • CII IF3 Insurance Underwriting Process
    • CII IF4 Insurance Claims Handling Process
    • CII IF5 Motor Insurance Products
    • J0 Exams
    • CII J02 Trusts
    • CII J05 Pension Income Options
    • CII J07 Supervision in a Regulated Environment
    • CII J10 Discretionary Investment Management
    • CII J12 Securities Advice and Dealing
    • LP Exams
    • CII LP2 Financial Services Products and Solutions
    • R0 Exams
    • CII R01 Financial Services, Regulation and Ethics
    • CII R02 Investment Principles and Risk
    • CII R03 Personal Taxation
    • CII R04 Pensions and Retirement Planning
    • CII R05 Financial Protection
    • CII R06 Financial Planning Practice
    • CII R07 Advanced Mortgage Advice
  • CII Qualifications
    • CII Qualifications Overview
    • Advanced Diplomas
    • CII Advanced Diploma in Financial Planning
    • Awards
    • CII Award in Financial Administration
    • CII Award in Life and Pensions Foundations
    • CII Award in Long Term Care Insurance
    • CII Award in Regulated Pension Transfer Advice
    • Certificates
    • CII Certificate in Advanced Mortgage Advice
    • CII Certificate in Discretionary Investment Management
    • CII Certificate in Equity Release
    • CII Certificate in Financial Services
    • CII Certificate in Insurance
    • CII Certificate in Investment Operations
    • CII Certificate in Mortgage Advice
    • CII Certificate in Paraplanning
    • CII Certificate in Regulated Financial Services Operations
    • CII Certificate in Securities Advice and Dealing
    • Diplomas
    • CII Diploma in Financial Planning
    • CII Diploma in Regulated Financial Planning
  • Main Pages
  • Home
  • Blog
  • Corporate
  • FAQ
  • About
  • Contact
  • Home
  • Blog
  • Corporate
  • FAQs
  • About
  • Contact
Cart
Brand Financial Training
  • CII Exams
    • Exam-Col-01
      • AF Exams
      • CII AF1 Personal Tax and Trust Planning
      • CII AF4 Investment Planning
      • CII AF5 Financial Planning Process
      • CII AF7 Pension Transfers
      • CF Exams
      • CII CF1 UK Financial Services, Regulation and Ethics
      • CII CF6 Mortgage Advice
      • CII CF8 Long Term Care Insurance
      • ER Exams
      • CII ER1 Equity Release
      • FA Exams
      • CII FA1 Life Office Administration
      • CII FA2 Pensions Administration
    • Exam-Col-02
      • IF Exams
      • CII IF1 Insurance Legal and Regulatory
      • CII IF2 General Insurance Business
      • CII IF3 Insurance Underwriting Process
      • CII IF4 Insurance Claims Handling Process
      • CII IF5 Motor Insurance Products
      • J0 Exams
      • CII J02 Trusts
      • CII J05 Pension Income Options
      • CII J07 Supervision in a Regulated Environment
      • CII J10 Discretionary Investment Management
      • CII J12 Securities Advice and Dealing
      • LP Exams
      • CII LP2 Financial Services Products and Solutions
    • Exam-Col-03
      • R0 Exams
      • CII R01 Financial Services, Regulation and Ethics
      • CII R02 Investment Principles and Risk
      • CII R03 Personal Taxation
      • CII R04 Pensions and Retirement Planning
      • CII R05 Financial Protection
      • CII R06 Financial Planning Practice
      • CII R07 Advanced Mortgage Advice
      • Study Kit Box
  • CII Qualifications
    • Qual-Col-01
      • CII Qualifications Overview
      • CII Advanced Diploma in Financial Planning
      • CII Award in Financial Administration
      • CII Award in Life and Pensions Foundations
      • CII Award in Long Term Care Insurance
      • CII Award in Regulated Pension Transfer Advice
    • Qual-Col-02
      • CII Certificate in Advanced Mortgage Advice
      • CII Certificate in Discretionary Investment Management
      • CII Certificate in Equity Release
      • CII Certificate in Financial Services
      • CII Certificate in Insurance
      • CII Certificate in Investment Operations
      • CII Certificate in Mortgage Advice
      • CII Certificate in Paraplanning
      • CII Certificate in Regulated Financial Services Operations
      • CII Certificate in Securities Advice and Dealing
    • Qual-Col-03
      • CII Diploma in Financial Planning
      • CII Diploma in Regulated Financial Planning
Brand Financial Training > AF7 > How to Calculate Pension Input Periods (PIPs)
  • Previous
  • Next
How to Calculate Pension Input Periods (PIPs)
September 10, 2019
How to Calculate Pension Input Periods (PIPs)

How to Calculate Pension Input Periods (PIPs)

Posted by The Team at Brand Financial Training on September 10, 2019 in AF7, J05, Pensions, R04
Last updated on September 25th, 2019 at 4:13 am
How to Calculate Pension Input Periods (PIPs)

In this article, we look at pension input periods – or PIPs.  This is the period of time where total pension contributions are calculated to see if the annual allowance or money purchase annual allowance has been exceeded. Read on to learn more as you prepare for any of the CII AF7, J05 or R04 exams.

THIS ARTICLE IS RELEVANT TO EXAMINABLE TAX YEAR 2019/20.

Since 2016/17, PIPs have been aligned with the tax year (prior to this date, they could start and end at any point).

Total Pension Input for Money Purchase Scheme

This is pretty straightforward; the calculation is done at the end of the PIP and is the gross amount of pension contributions paid (either by the member or their employer or someone else) and includes any part that does not get tax relief.  This amount is entered on the self-assessment tax return to see if an annual allowance tax charge is due to be paid.

What’s not included is:

  • Contributions paid by an individual or someone other than the employer after age 75
  • Investment income or returns 

Total Pension Input for Defined Benefit Schemes

This is not quite as straightforward.  For active members of DB schemes, total pension input is calculated as the increase in capital value of pension rights over the PIP.  The annual pension is multiplied by 16 to give it a notional value and any lump sum is added.

This is the process:

Calculate the value of benefits at start of the PIP - the opening pension input value
Multiply this by 16.
Add any lump sum (but don’t multiply by 16).
Increase by 2.4% for 2019/20 (the CPI rate to September 2018)
Calculate value of benefits at end of the PIP - the closing pension input value
Multiply by 16.
Add any lump sum (but don’t multiply by 16).
No need to increase by CPI as this value is already in today’s terms.
The difference between the two figures is the total pension input for the period.

 

Taking a look at pension input periods - or PIPs and how to calculate them. Share on X

 

Let’s look at an example:

At the beginning of the 2019/20 PIP, Nigel had been a member of his defined benefit scheme for 12 years, the scheme had an accrual rate of 1/60th and his pensionable salary was £62,000.

At the end of the 2019/20 PIP Nigel had been a member of the scheme for 13 years and his pensionable salary had increased to £67,000.

Nigel’s benefits at the beginning of the 2019/20 pension input period were:

  • 12/60 x £62,000 = £12,400

  • £12,400 x 16 = £198,400

  • £198,400 x 1.024 = £203,161.60

Nigel’s benefits at the end of the 2019/20 pension input period are:

  • 13/60 x £67,000 = £14,516.67

  • £14,516.67 x 16 = £232,266.72

Nigel’s total pension input is therefore:

£232,266.72 - £203,161.60 = £29,105.12

 

In this example, Nigel is within the annual allowance of £40,000.

For both DC and DB schemes, where a member takes benefits due to serious ill-health or death occurs, no amount will arise for the PIP that ends in that tax year.

Grab the resources you need!

If you’re studying for your CII R04 exam, and you’re a little nervous about it, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the R04 mock paper taster now!

Click here to download our free taster mock paper for CII R04

Alternatively, you can download a taster for AF7 or J05 if you are preparing for either of those exams.

Tags:Calculating PIPs, Total Pension Input for Defined Benefit Schemes, Total Pension Input for Money Purchase Scheme

Subscribe

Get new blog posts delivered straight to your inbox!

By ticking this box you are giving your consent for us to email you when a new post is published on our blog. We may also email you with additional information and offers that we believe may be of interest to you. We take your privacy very seriously and we will never share your personal information. You can unsubscribe from our emails at any time. For information about how we handle your data, please read our privacy notice.

Please tick the box to give your consent for us to email you when a new post is published on our blog. We may also email you with additional information and offers that we believe may be of interest to you. We take your privacy very seriously and we will never share your personal information. You can unsubscribe from our emails at any time. For information about how we handle your data, please read our privacy notice at https://brandft.co.uk/privacy-policy/

Search

To search our blog just enter a keyword and click search.

Latest Posts

  • How to Calculate Modified Duration
    By The Team at Brand Financial Training
    June 24, 2025
  • Friday Five Focus on Investments – 5 Questions in 5 Minutes – 20 Jun 2025
    By The Team at Brand Financial Training
    June 20, 2025
  • Our Post-Exam Review of the April 2025 CII R06 Exam
    By The Team at Brand Financial Training
    June 17, 2025
  • Friday Five Focus on Regulation – 5 Questions in 5 Minutes – 13 Jun 2025
    By The Team at Brand Financial Training
    June 13, 2025

Follow us

Categories

Archives


All content © Brand Financial Training Ltd, 2008-2024. Unauthorised use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

Excerpts and links may be used, provided that full and clear credit is given to Brand Financial Training Ltd https://brandft.co.uk with appropriate and specific direction to the original content.

Contacts

Email :
Tel : +44 (0)345 680 1682
You can leave a voicemail for us but for the quickest response, please email our customer service team at the above email address, who will respond within 24 hours.

Calls are charged at the same rate as standard landline numbers. This rate will depend on your telephone provider and may be included in your tariff.

Newsletter

Stay up to date with our informative monthly newsletter tailored for you.

Learn more

We write for...

Logo: Money Marketing Logo: Professional Paraplanner Professional Paraplanner Awards 2021
Learn more

We support...

In Aid of Trussell Trust In Aid of Refuge Together we will end homelessness
UNICEF UK Ukraine Appeal, Save the Children Gaza Appeal
Find out more about how we work to make a social impact.
Learn more

Home
About
Blog
Contact
Social Impact

Money back guarantee
Corporate
Help and FAQs
Learning Resource Updates

Email :
Tel : +44 (0)345 680 1682 (Voicemail only)

Calls are charged at the same rate as standard landline numbers. This rate will depend on your telephone provider and may be included in your tariff.

LinkedInLinkedInTwitter/XTwitter/X YouTubeYouTubeYouTubeYouTube

©2025 Brand Financial Training Ltd · Reg No: 7153959 · VAT No: 979 2499 45

Policies | Terms of use | Terms of sale | Privacy policy | Cookie policy