Calculate Your Annual Allowance
Enter your income to check if tapering applies to your pension contributions.
Your Pension Allowance
Your Annual Allowance
Taper Applied
Max Contribution
Carry Forward Calculator
Calculate unused allowance from the previous 3 tax years to boost your contribution limit.
Available Allowance
Total Available
Carried Forward
Current Year
Annual Allowance Tax Charge
Calculate the tax charge if your contributions exceed your available allowance.
Annual Allowance Tax Charge
Excess Contributions
Tax Charge
Net Cost of Excess
What is the Pension Annual Allowance?
The pension annual allowance is the maximum amount of pension savings you can make each year with tax relief. For the 2025/26 tax year, the standard annual allowance is £60,000. This limit includes:
- Personal pension contributions (with basic rate tax relief)
- Employer pension contributions
- Any pension growth in defined benefit schemes
If your total pension contributions exceed your annual allowance, you'll face an annual allowance tax charge on the excess amount.
Key Allowance Limits 2025/26
| Limit Type | Amount | Details |
|---|---|---|
| Standard Annual Allowance | £60,000 | Maximum with full tax relief |
| Minimum Tapered Allowance | £10,000 | For highest earners |
| Money Purchase Annual Allowance | £10,000 | If flexibly accessed pension |
| Lifetime Allowance | Abolished | Removed from April 2024 |
2023 Budget Changes
The Spring Budget 2023 increased the annual allowance from £40,000 to £60,000, raised the minimum tapered allowance from £4,000 to £10,000, and increased the MPAA from £4,000 to £10,000. The Lifetime Allowance was abolished from April 2024.
Tapered Annual Allowance for High Earners
If you're a high earner, your annual allowance may be reduced (tapered). The taper applies if BOTH of the following conditions are met:
| Income Test | Threshold | What It Means |
|---|---|---|
| Threshold Income | Over £200,000 | Taxable income minus personal pension contributions |
| Adjusted Income | Over £260,000 | Threshold income plus employer pension contributions |
How Tapering Works
For every £2 your adjusted income exceeds £260,000, your annual allowance reduces by £1, down to a minimum of £10,000.
Taper Visualization
£60k allowance £310,000
£35k allowance £360,000+
£10k allowance
Taper Examples
| Adjusted Income | Taper Reduction | Your Allowance |
|---|---|---|
| £260,000 or less | £0 | £60,000 |
| £280,000 | £10,000 | £50,000 |
| £300,000 | £20,000 | £40,000 |
| £320,000 | £30,000 | £30,000 |
| £360,000 or more | £50,000 | £10,000 (minimum) |
Important: Salary Sacrifice Impact
Salary sacrifice pension contributions reduce your threshold income but increase employer contributions in adjusted income. This can affect whether tapering applies. Consider both income tests carefully.
Carry Forward Unused Allowance
If you didn't use your full annual allowance in previous years, you can carry forward the unused amount to use in the current year. This allows contributions well above the standard £60,000 limit.
Carry Forward Rules
- You can carry forward unused allowance from the previous 3 tax years
- You must have been a member of a registered pension scheme in those years
- Current year allowance is used first
- Carried forward allowance used in order, oldest year first
- You can only contribute up to your relevant UK earnings
Historical Annual Allowances
| Tax Year | Standard Allowance | Carry Forward Eligible |
|---|---|---|
| 2025/26 (Current) | £60,000 | — |
| 2023/24 | £60,000 | Yes |
| 2022/23 | £40,000 | Yes |
| 2021/22 | £40,000 | Yes |
| 2020/21 | £40,000 | Expired |
Maximum Possible Contribution 2025/26
If you made no pension contributions for the last 3 years (and were a pension scheme member), your maximum contribution for 2025/26 could be:
- 2025/26: £60,000
- 2023/24 carry forward: £60,000
- 2022/23 carry forward: £40,000
- 2021/22 carry forward: £40,000
- Total: £200,000 (subject to earnings)
Annual Allowance Tax Charge
If your total pension contributions exceed your available annual allowance (including carry forward), you'll pay an annual allowance tax charge on the excess.
How the Charge is Calculated
The excess contributions are added to your income and taxed at your marginal rate:
| Tax Band | Rate | £10,000 Excess = Charge |
|---|---|---|
| Basic Rate | 20% | £2,000 |
| Higher Rate | 40% | £4,000 |
| Additional Rate | 45% | £4,500 |
Scheme Pays Option
If your annual allowance tax charge is more than £2,000 AND your benefits in one scheme exceeded the annual allowance, you can ask your pension scheme to pay the charge. The scheme will reduce your pension benefits accordingly.
Mandatory Scheme Pays
Your scheme must offer "Scheme Pays" if:
- The tax charge is over £2,000
- Your pension input to that scheme exceeds the annual allowance
- You notify them by 31 July following the tax year
Money Purchase Annual Allowance (MPAA)
If you've flexibly accessed your defined contribution pension, your annual allowance for future contributions to defined contribution pensions is restricted to the Money Purchase Annual Allowance of £10,000.
What Triggers the MPAA
- Taking income from a flexi-access drawdown fund
- Taking an uncrystallised funds pension lump sum (UFPLS)
- Taking payments from a flexible annuity where income can decrease
- Exceeding the cap on capped drawdown
What Does NOT Trigger MPAA
- Taking tax-free cash only (25% of your pot)
- Buying a lifetime annuity
- Taking benefits from a defined benefit scheme
- Taking a trivial commutation lump sum
- Taking small pots (£10,000 or less from 3 schemes max)
MPAA Changed in 2023
The MPAA increased from £4,000 to £10,000 from 6 April 2023, giving more flexibility to those who've accessed their pensions but want to continue contributing.
Frequently Asked Questions
Your annual allowance includes:
- Personal contributions – including tax relief at source
- Employer contributions – including salary sacrifice
- Defined benefit growth – the increase in the value of your DB pension (16x the increase in annual pension, plus any increase in cash lump sum)
- Third party contributions – anyone contributing to your pension
Your pension provider will send you a pension savings statement if you exceed the annual allowance.
Threshold Income = Taxable income minus:
- Personal pension contributions (gross amount)
- Lump sum death benefit pension payments
Adjusted Income = Threshold income plus:
- Employer pension contributions
- Pension contributions via salary sacrifice
- Defined benefit pension input amount
Both tests must exceed their thresholds for tapering to apply.
Yes, you still get tax relief on contributions over the annual allowance. However:
- You'll pay an annual allowance tax charge on the excess
- This effectively claws back some or all of the tax relief
- For higher/additional rate taxpayers, you may still get some net benefit if the charge is at a lower rate than your relief
Always calculate the net position before intentionally exceeding your allowance.
If you exceed your annual allowance:
- Your pension provider will send you a Pension Savings Statement
- You must declare the excess on your Self Assessment tax return
- You'll pay the charge either personally or via Scheme Pays
- HMRC deadline: Complete your tax return by 31 January following the tax year
If the charge is over £2,000, consider asking your scheme to pay (they'll reduce your pension accordingly).
The Lifetime Allowance (LTA) tax charge was removed from April 2023, and the LTA was fully abolished from April 2024. You can now build a pension pot of any size without LTA charges.
However, some limits remain:
- Tax-free cash: Maximum £268,275 (25% of old £1,073,100 LTA) unless you have protection
- Lump sum death benefit allowance: £1,073,100
Salary sacrifice has a complex effect on the taper:
- Threshold income: Reduced (as you sacrifice salary for pension)
- Adjusted income: Remains similar (employer contribution increases)
This can sometimes help avoid tapering if it brings threshold income below £200,000, even if adjusted income is high. However, if both thresholds are already exceeded, salary sacrifice won't help avoid the taper.
Yes, you can still carry forward unused allowance even if you have a tapered allowance. The carry forward is based on your actual allowance in each prior year:
- If your allowance was tapered in a prior year, the unused amount from that tapered allowance carries forward
- If you had the full allowance in prior years, that amount carries forward
Calculate each year individually based on your income at the time.
Key deadlines to remember:
- 5 April: End of tax year – contributions must be made by this date
- 6 October: Pension providers must send Pension Savings Statements by this date
- 31 January: Self Assessment deadline for declaring excess and paying any charge
- 31 July (following year): Deadline to notify scheme for mandatory Scheme Pays
Related UK Calculators
Last Updated: December 2025 | Based on HMRC guidance for 2025/26 tax year