UK Pension Annual
Allowance Calculator 2026

The standard Annual Allowance (AA) is £60,000 for the 2026-27 tax year — the maximum amount that can be contributed to UK registered pension schemes (workplace pensions, SIPPs, employer contributions combined) while still receiving full tax relief. The £60k limit was raised from £40k effective 6 April 2023.

Contributions above this trigger an Annual Allowance Charge equal to your marginal income tax rate. Three special variations apply: tapered AA for high earners (down to £10k minimum), Money Purchase AA for those who've flexibly accessed pensions (£10k cap on DC contributions), and carry-forward (use unused AA from 3 prior years).

Tapered Annual Allowance reduces the standard £60,000 allowance for high earners. Triggered when both: (1) Threshold income (basically taxable income before salary-sacrificed pension contributions) exceeds £200,000 AND (2) Adjusted income (taxable income PLUS all pension contributions including employer's) exceeds £260,000.

For every £2 of adjusted income above £260,000, the AA reduces by £1. Floor of £10,000 reached when adjusted income ≥ £360,000.

Example: £300,000 adjusted income → AA reduced by £20,000 (£40,000 over threshold ÷ 2) = £40,000 AA.

MPAA caps Defined Contribution (DC) pension contributions at £10,000 per year and is triggered the first time you flexibly access pension benefits — most commonly drawing income via flexi-access drawdown above the 25% tax-free portion, OR taking an Uncrystallised Funds Pension Lump Sum (UFPLS), OR a defined benefit lump sum that exceeds permitted maximum. Once triggered, MPAA replaces your AA for DC contributions for life.

Defined Benefit contributions remain governed by the standard AA. MPAA also blocks carry-forward of unused DC allowance.

The trigger and MPAA limit cannot be reversed.

If contributions in any of the 3 previous tax years were below the AA at the time, the unused amount can be carried forward to the current year, on top of the current year's AA. Conditions: you must have been a member of a UK registered pension scheme during those years (not necessarily contributing).

Use must be in chronological order — current year first, then earliest of the 3 prior years. Tapered AA limits are used (not the standard £60k) for years when taper applied.

Carry-forward is NOT available if MPAA is triggered (only standard AA portion). Maximum theoretical use: current year £60k + 3 prior years × £60k = £240k in one go (assuming no taper).

Excess contributions trigger an Annual Allowance Charge — paid at your marginal income tax rate (typically 40% for higher rate, 45% for additional rate, 60% effective in £100-£125,140 PA-tapered band). The charge is added to your Self Assessment tax bill.

Two payment options: (1) Pay personally via SA. (2) Scheme Pays — if charge >£2,000, ask scheme to pay from pension savings (pre-2026/27, can be voluntary; 'mandatory scheme pays' only applies to charge specifically attributable to in-year contributions exceeding standard AA, not taper). Excess contributions still receive tax relief, but the charge effectively recoups it.

From 6 April 2024 the Lifetime Allowance (LTA) was abolished. Two new lump-sum-based limits replaced it: Lump Sum Allowance (LSA) £268,275 — the cap on total tax-free pension lump sums you can take across all schemes in your lifetime (was 25% of LTA = £268,275).

Lump Sum and Death Benefit Allowance (LSDBA) £1,073,100 — the total tax-free lump sum that can be paid on death plus serious-ill-health lump sums. Withdrawals as drawdown income are NOT capped — the LSA limits only the tax-free lump sum.

Excess lump sum amounts are taxed as income at marginal rate. Transitional protections (FP2016, IP2016, Enhanced, Primary) generally retained the higher LSAs from pre-2024.

No. The lifetime allowance was abolished from 6 April 2024; its last value was £1,073,100 in 2023-24, and there is no longer a cap on the total you can build up in pensions. What replaced it limits tax-free cash, not pension size: the lump sum allowance of £268,275 (the most you can take as tax-free lump sums) and the lump sum and death benefit allowance of £1,073,100.

So a "lifetime pension allowance calculator" now really means checking your 2026-27 annual allowance of £60,000 (plus carry forward) and how much tax-free cash you have left. Source: HMRC Pension schemes rates and GOV.UK lump sum allowance guidance, checked 7 October 2026.

You need to have been a member of a UK registered pension scheme at some point in each earlier year you carry forward from — an active, deferred or pensioner member all count, even with nothing paid in that year. For 2026-27 the three years are 2023-24, 2024-25, 2025-26, each with a £60,000 allowance (less if the taper applied that year), so the most you could pay in this year without an annual allowance charge is £240,000.

Unused money purchase annual allowance cannot be carried forward. Source: GOV.UK unused annual allowance guidance and HMRC PTM055100, checked 7 October 2026.

Tax relief mechanisms: (1) Relief at source (most personal pensions, SIPPs, group personal pensions, NEST) — you contribute net of basic rate tax (20% added by HMRC automatically). Higher (40%) and additional (45%) rate taxpayers claim the extra relief via Self Assessment. (2) Net pay arrangement (most workplace DC schemes including teachers, NHS) — contributions deducted from gross salary before tax, automatic full relief at marginal rate. (3) Salary sacrifice — pre-tax contribution; saves both income tax and 8% Class 1 NIC for the employee, plus 15% employer NIC for the employer (often shared).

All three mechanisms ultimately give the same tax relief at your marginal rate within the AA — only timing and admin differ.

The fundamental principles (factual, not advice — verify your situation): (1) Contributing in the £100,000-£125,140 income band gives effective ~60% relief due to Personal Allowance taper — every £100 reducing income within this band restores £50 of PA, worth £20 of tax on top of the £40 of higher-rate relief — £60 in all, a 60% effective relief rate. (2) Salary sacrifice saves NIC on top of income tax. (3) Higher-rate band relief (40%) > basic-rate relief (20%) — contributing during higher-earning years maximises tax saved. (4) Carry-forward unused AA in years with bonuses/exit packages. (5) For very high earners hitting tapered AA, defined benefit accruals can sometimes be more efficient than DC contributions. Always check current rules — tax legislation changes (Finance Act 2024 abolished LTA; future changes may target tax relief, salary sacrifice, or AA).

Yes. Employer contributions to your pension are aggregated with your own member contributions (relief-at-source, net pay, and salary-sacrifice combined) when measuring the Annual Allowance.

The 'pension input amount' = employee contributions + employer contributions for DC schemes; for DB schemes it's calculated via a 16× formula on the increase in promised pension during the input period. This is why generous employer schemes can push high earners over the AA without them realising — particularly with the £200k threshold income / £260k adjusted income taper trigger.

Bonuses paid into pensions via salary sacrifice still count toward the AA.

If you exceed your AA (after taper, MPAA, and carry-forward), you must declare on your Self Assessment return — section under 'Pension savings tax charges' (Form SA101). Tax year for AA = 6 April to 5 April (UK fiscal year).

Self Assessment deadline: 31 January following tax year end (online; paper 31 October). HMRC has 4 years to query AA charges (extended to 6 if careless, 20 if deliberate).

Pension scheme administrators must report contributions exceeding standard AA via the Pension Scheme Tax Returns; HMRC then matches against personal SA. Mandatory scheme pays threshold: if AA charge >£2,000 and contributions to that scheme exceeded standard AA, can elect for scheme to pay from your pot (election deadline 31 July following the tax year).