NHS Pension Annual Allowance Charge Calculator
How to Use This Calculator
Request this from NHS Pensions — it shows your Pension Input Amount (pension growth value).
Standard AA is £60,000 in 2025/26. High earners may have a tapered allowance.
Unused allowance from 2022/23, 2023/24, and 2024/25 can offset excess growth.
If the charge exceeds £2,000 and PIA exceeds £60,000, you can elect for NHS Pensions to pay the charge.
Frequently Asked Questions
What is the NHS Pension annual allowance charge?
The annual allowance limits tax-relieved pension growth to £60,000/year (2025/26). For NHS defined benefit pensions, 'growth' is calculated as (pension at year end × 16) minus (opening pension × 16 × CPI). If this exceeds your allowance, you pay income tax on the excess.
How is NHS pension growth calculated?
For DB pensions: Pension Input Amount = (closing pension × 16 + lump sum) - ((opening pension × 16 + opening lump sum) × CPI inflation factor). NHS Pensions sends a Pension Savings Statement if growth may exceed £60,000.
What is the tapered annual allowance?
High earners (threshold income over £200,000 and adjusted income over £260,000) have their £60,000 allowance tapered down. For every £2 of adjusted income over £260,000, the allowance reduces by £1, to a minimum of £10,000.
What is carry forward?
If you didn't use your full annual allowance in any of the 3 previous tax years, you can carry the unused allowance forward to offset this year's excess. You must have been in a registered pension scheme in those years.
What is the McCloud remedy?
The McCloud remedy affects NHS staff who were moved to the 2015 scheme. Affected members receive protection and may have their pensions recalculated for certain years. This can affect annual allowance charges for 2015-2022 — seek specialist advice.
What is Scheme Pays?
Scheme Pays allows you to pay your annual allowance charge from your NHS pension, reducing your future benefit. Mandatory Scheme Pays applies if charge >£2,000 and PIA >£60,000. Voluntary Scheme Pays requires application by 31 July.
Does the annual allowance apply to the money purchase pension too?
The NHS has a 1995/2008 and 2015 scheme (defined benefit). Separate Money Purchase Annual Allowance (MPAA) rules apply if you've flexibly accessed a DC pension — reducing DC pension allowance to £10,000.
When must I declare the charge?
Report the annual allowance charge on your Self Assessment tax return for the relevant tax year. If using Scheme Pays, submit the election to NHS Pensions by 31 July following the tax year end.