How UK pensions work: workplace, personal and State pensions
A practical guide to workplace and personal pensions, tax relief, annual allowances, investment choices, the State Pension and turning pension savings into retirement income.
Retire · Calculator 25
Pension Annual Allowance & Carry Forward Calculator 2026/27
Build a four-year pension allowance ledger, apply tapering and carry-forward, test the Money Purchase Annual Allowance and separate annual-allowance room from personal tax-relief limits.
1 Enter your figures2 Review assumptions3 Explore the result
Current tax year: 2026/27.Carry-forward years are 2023/24, 2024/25 and 2025/26, used oldest first.
Your figures
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Modelled annual-allowance excess
£0No excess remains after the current allowance and modelled carry-forward. This does not itself confirm contribution tax relief.2026/27 annual allowance£60,000Standard allowance under the entered incomes
Unused prior allowance£90,000Before any use this year
Indicative extra personal DC room£90,000Lowest of annual-allowance, earnings and MPAA room
Four-year allowance ledger
Unused allowance is shown oldest first. “Used now” applies only where 2026/27 total input exceeds this year’s allowance.
| Tax year | Member? | Allowance used for ledger | Pension input | Unused brought forward | Used in 2026/27 | Still unused |
|---|---|---|---|---|---|---|
| 2023/24 | Yes | £60,000 | £25,000 | £35,000 | £0 | £35,000 |
| 2024/25 | Yes | £60,000 | £30,000 | £30,000 | £0 | £30,000 |
| 2025/26 | Yes | £60,000 | £35,000 | £25,000 | £0 | £25,000 |
| 2026/27 | Current | £60,000 | £45,000 | — | £0 | £105,000 |
£35,000 from 2023/24 is still unused.
On the entered figures, this is the oldest remaining allowance and is normally the next amount to expire after 5 April 2027. A contribution must still satisfy tax-relief, scheme and MPAA rules.
Assumptions used
- The standard annual allowance is £60,000 and the MPAA is £10,000 for every tax year shown.
- The taper applies only when threshold income exceeds £200,000 and adjusted income exceeds £260,000; it reduces allowance by £1 for each £2 above £260,000, to a £10,000 floor.
- Carry-forward is used oldest first and requires registered-scheme membership in the source year.
- Where the MPAA applies, unused MPAA is never carried forward. The calculation compares HMRC’s default and alternative methods and uses the higher chargeable amount.
- Personal contribution tax relief is capped at relevant UK earnings, with a £3,600 gross allowance where earnings are lower. Employer contributions are outside that earnings cap.
- The estimated charge simply multiplies excess by the selected marginal rate; an actual charge can span tax bands and Scheme Pays has separate conditions.
Gather pension input statements before acting. Defined-benefit growth, salary sacrifice and employer contributions are common reasons the amount counted for the annual allowance differs from what left your bank account.
Common questions
Pension annual allowance FAQs
What is the pension annual allowance for 2026/27?
The standard annual allowance is £60,000. It covers total pension input across registered schemes, including employer contributions and defined-benefit growth. The tapered annual allowance or Money Purchase Annual Allowance can make the usable amount lower.
How does pension carry-forward work?
Unused annual allowance from the previous three tax years can normally support input above the current year's allowance. You must first use the current allowance, then unused amounts are used oldest first. You must have been a member of a registered pension scheme in the year from which allowance is carried.
Which years can I carry forward into 2026/27?
The three source years are 2023/24, 2024/25 and 2025/26. The planner lists them oldest first because unused 2023/24 allowance is normally the first to expire if it is not used during 2026/27.
When does the tapered annual allowance apply?
For the years in this planner, tapering applies only where threshold income exceeds £200,000 and adjusted income exceeds £260,000. The £60,000 allowance is reduced by £1 for every £2 of adjusted income above £260,000, down to a minimum £10,000.
What is the Money Purchase Annual Allowance?
The MPAA is a £10,000 limit on money-purchase pension input after certain flexible pension access. Unused MPAA cannot be carried forward, and ordinary carry-forward cannot offset money-purchase input above the MPAA. Other pension input is tested through HMRC's alternative annual allowance calculation.
Do employer pension contributions count?
Yes. Employer defined-contribution payments, including salary sacrifice treated as employer input, count towards the annual allowance. They do not use the employee's relevant-earnings limit for personal tax relief.
How do defined-benefit pensions count?
A defined-benefit scheme calculates a pension input amount from the inflation-adjusted growth in promised benefits over its pension input period. It is not simply the employee and employer cash contributions. Ask the scheme for the official pension input amount.
Is carry-forward the same as tax relief on personal contributions?
No. Carry-forward can increase annual-allowance capacity, but personal tax relief is generally limited to relevant UK earnings, with up to £3,600 gross potentially relievable where earnings are lower. Both tests can apply to the same contribution.
What happens if I exceed the annual allowance?
The excess is added to taxable income for an annual allowance charge. The planner's charge is only a rough excess-times-rate estimate; an actual calculation can span tax bands. Scheme Pays may be available or required in some circumstances, subject to deadlines and scheme rules.