There is no longer any opportunity to carry back your entitlement from one year to the next, so the message from the government is effectively that you use it or lose it, the company points out.

However, HM Revenue and Customs (HRMC) does allow you to invest on the basis of estimated earnings so, even if you do not have completely accurate figures before the tax year end, you do not have to wait until you do. Any errors can be corrected in the new tax year.

The stockbroker explains that if a SIPP investor’s earnings turn out to be lower than expected, the excess contributions may remain within his or her pension fund, but any reclaimed tax must be repaid to HMRC. Alternatively, the investor can remove the excess from the SIPP on repayment of the reclaimed tax to HMRC.

Personal contributions into a SIPP are paid net of basic-rate tax, which is then reclaimed from HMRC by the SIPP administrator and paid into the individual’s pension fund.

According to Charles Stanley, higher-rate taxpayers usually claim the difference between basic-rate and higher-rate tax relief via their self assessment return. Tax relief on contributions is limited to 100 per cent of relevant UK earnings for the tax year in which the contributions are paid. It is also limited by the annual allowance and, ultimately, by the lifetime allowance (£1.6 million in 2007 to 2008).