The £60,000 allowance
Applies to total contribution across all your pensions: - Your personal contribution + tax relief - Employer contribution - Any partner/family contribution counted as yours
If total exceeds £60,000, tax charge is applied at your marginal rate on the excess.
The tapered annual allowance
For high earners: - Total income above £260,000 triggers taper - For every £2 of income above £260,000, allowance reduced by £1 - Minimum allowance: £10,000 (once income exceeds £360,000)
Example: £300,000 total income - Excess: £40,000 - Taper: £20,000 reduction - Adjusted allowance: £40,000
Carry-forward
Unused allowance from previous 3 tax years can be carried forward:
- Only if you were a UK pension scheme member in those years
- Use current year's allowance first
- Then oldest year's unused
- Then progressively newer years
Example (someone who used only £30k of £60k allowance each year for 3 years): - Current year allowance: £60,000 - Plus unused from 3 previous years: 3 × £30,000 = £90,000 - Total available in current year: £150,000
When to use carry-forward
- One-off large contribution (bonus, inheritance, business sale)
- Catching up for a career break
- End-of-career maximum sacrifice
Common carry-forward mistakes
- Trying to use it if you weren't a scheme member in the earlier year
- Miscalculating available unused allowance
- Not planning the timing carefully
Interaction with other rules
- Money purchase annual allowance (MPAA): If you've drawn taxable pension income under flexible access rules, allowance is £10,000
- Lifetime allowance: Was abolished from April 2024 — no lifetime cap now
- Employer contribution counts: Yes — but is deductible for employer
In short
UK pension annual allowance 2026/27 is £60,000 — total contribution from all sources. Tapers to £10,000 for those with income over £260,000. Carry-forward from prior 3 years available if you were a scheme member. Watch total contribution + employer + tax relief.