Annual allowance and carry forward
Annual allowance calculator: your tapered allowance and any charge for 2026/27
The calculator opens on a high earner with £280,000 of income, a net pay contribution and employer money. Change the figures to see the allowance HMRC’s steps give you and the charge on any excess.
Independent site, not a government service. Relief is claimed through your pension provider, your payroll or HMRC (Self Assessment or the GOV.UK claim service).
Example, not your result yet· change a figure to see yours
Your annual allowance, 2026/27
£40,000
You are £10,000 over: a charge of about £4,500.
| Threshold income | £250,000 |
| Adjusted income | £300,000 |
| Reduction by the taper | £20,000 |
| Total pension savings this year | £50,000 |
| Allowance with carry forward | £40,000 |
| Above your allowance | £10,000 |
| Annual allowance charge | £4,500 |
Tapered: £1 less for every £2 of adjusted income above £260,000, never below £10,000.
The excess is added to your income and taxed at your own rates (45.0% on average here). Above £2,000 of charge you can ask the scheme to pay it ("scheme pays").
The annual allowance for 2026/27 is £60,000 of pension savings, counting your own gross contributions and everything your employer pays in. It is tapered only when two tests are both failed: threshold income above £200,000 and adjusted income above £260,000. The allowance then falls by £1 for every £2 of adjusted income over £260,000, down to £10,000 (HMRC, pension schemes rates). Threshold income is your net income less contributions paid by relief at source, with any salary given up through sacrifice added back; adjusted income adds employer contributions and net pay deductions back on top. With £280,000 of income, £30,000 through net pay and £20,000 from the employer, threshold income is £250,000, adjusted income £300,000 and the allowance £40,000, so £10,000 of the £50,000 saved is over it: a charge of about £4,500 unless carry forward covers it.
Figures checked by Radif Partners · Editorial policy · How the sums are done
The taper, income by income
The table keeps the same savings, £20,000 through net pay and £20,000 from the employer, and moves income up. The taper only bites once adjusted income passes £260,000; it reaches its floor of £10,000 at £360,000 of adjusted income.
| Income | Threshold income | Adjusted income | Allowance | Over it | Charge |
|---|---|---|---|---|---|
| £210,000 | £190,000 | £230,000 | £60,000 | £0 | £0 |
| £260,000 | £240,000 | £280,000 | £50,000 | £0 | £0 |
| £280,000 | £260,000 | £300,000 | £40,000 | £0 | £0 |
| £300,000 | £280,000 | £320,000 | £30,000 | £10,000 | £4,500 |
| £330,000 | £310,000 | £350,000 | £15,000 | £25,000 | £11,250 |
| £360,000 | £340,000 | £380,000 | £10,000 | £30,000 | £13,500 |
Why the method of contribution changes threshold income
Two people with £230,000 of salary each put £40,000 into a pension and get £20,000 from their employer. The one paying by relief at source deducts the contribution from threshold income, which falls to £190,000: below £200,000, so no taper. The one who sacrifices salary has it added back, so threshold income stays at £230,000; adjusted income is £250,000, under £260,000, so here too the allowance stays at £60,000. Move the salary up by £40,000 and only the second person is tapered. The calculator asks for the method for that reason.
The order the calculator follows
- Threshold income: taxable income less relief at source contributions, plus salary sacrificed for pension after 8 July 2015.
- Adjusted income: taxable income plus net pay contributions plus all employer contributions.
- Allowance: £60,000, less half the adjusted income above £260,000 if both tests fail, never under £10,000.
- Money purchase annual allowance of £10,000 if you have flexibly accessed a pension; the charge is on the larger excess (HMRC, MPAA steps).
- Excess over the allowance plus carry forward, taxed as the top slice of your income.
Defined benefit members should enter the pension input amount as employer money. The carry forward calculator works out the unused allowance of the three earlier years, and the MPAA guide explains what triggers the lower limit. Lump sums are a different allowance, set out on GOV.UK.
Three mistakes that create a surprise charge
The first is forgetting employer money. A director who pays £40,000 personally and has the company pay £30,000 has saved £70,000, not £40,000. The second is a defined benefit accrual that jumps in a year of promotion: the pension input amount is based on the rise in promised pension, so a large pay rise in a final salary scheme can use most of the allowance on its own. The third is a one-off income, such as a bonus or a share sale, that takes threshold income above £200,000 for a single year. In each case the charge is due through Self Assessment for the year in which the savings were made, and the scheme's pension savings statement, due by 6 October after the tax year, is the place to check the figures.