Use cases / Pensions
Pension tax: annual allowance, taper and carry-forward
Pension contributions get tax relief, but only up to the annual allowance, counting your own contributions and your employer's. Go over it and the excess is taxed at your marginal rate, unless unused allowance from earlier years covers it.
Key figures
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Standard annual allowance | £60,000 | £60,000 |
| Taper: threshold income above | £200,000 | £200,000 |
| Taper: adjusted income above | £260,000 | £260,000 |
| Minimum tapered allowance | £10,000 | £10,000 |
| Money purchase annual allowance (MPAA) | £10,000 | £10,000 |
| Carry-forward look-back | 3 tax years | 3 tax years |
How the rules work
Annual allowance
The standard allowance is £60,000. It covers total pension input for the tax year: your contributions (grossed up for basic-rate relief at source), your employer's, and the growth in any defined benefit pension.
Taper for high earners
If threshold income is over £200,000 and adjusted income over £260,000, the allowance falls by £1 for every £2 above £260,000, to a floor of £10,000.
Carry-forward
Unused allowance from the previous 3 tax years can be added to this year's, as long as you were a member of a registered pension scheme in those years. The current year's allowance is used first, then the earliest of the three years.
MPAA
Once you have flexibly accessed a defined contribution pension (for example by taking taxable income from drawdown), future money purchase contributions are limited to £10,000 a year and carry-forward cannot be used for the excess.
The charge
Any excess is added to your income and taxed at the rates that apply to it, so it is usually 20%, 40% or 45%. Often the scheme can pay it from your benefits.
Tax relief on your own contributions is separately limited to your relevant earnings. This page covers the annual allowance only.
Work out your own number
- Pension annual allowance – Allowance, taper, carry-forward and MPAA charge checks.
Then sign up free to save the result and see how to lower your bill.
HMRC and GOV.UK sources
Related
General information for UK taxpayers, not personal tax advice. Figures reflect the 2025/26 and 2026/27 tax years and are checked against the same rules our calculators use.