Pension Annual Allowance Checker
Are you at risk of breaching the £60,000 Annual Allowance? High earners face tapering to £10,000. Check your position.
Understanding Pension Annual Allowance for 2026/27
The Pension Annual Allowance is the maximum you can contribute to a UK pension each tax year and still receive tax relief. For 2026/27 the standard Annual Allowance is £60,000, a figure restored from the previous £40,000 in the 2023 Spring Budget. Contributions above the Annual Allowance trigger an Annual Allowance Charge at your marginal rate, which can be devastating if you accidentally exceed it.
The complication is the Tapered Annual Allowance. High earners with adjusted income above £260,000 see their £60,000 allowance reduced by £1 for every £2 of excess, down to a minimum of £10,000. Critically, the taper only kicks in if threshold income (broadly: taxable income minus personal pension contributions) also exceeds £200,000 — so some high earners can avoid the taper entirely by contributing more to their pension via salary sacrifice.
The good news is carry-forward. If you have unused Annual Allowance from the three previous tax years (and were a pension scheme member in each), you can add that to the current year’s limit. For someone who hasn’t contributed recently this means up to £200,000+ can be put into a pension in a single year without breaching limits. The pension annual allowance calculator above shows your effective allowance after tapering, your current contributions, and any carry-forward headroom.
Key Figures for the 2026/27 Tax Year
- Standard Annual Allowance: £60,000 (2026/27)
- Minimum Tapered AA: £10,000
- Threshold income trigger: £200,000 (both conditions must apply)
- Adjusted income taper start: £260,000
- Taper rate: £1 reduction per £2 of excess
- Full taper point: £360,000 adjusted income
- Carry-forward window: 3 previous tax years
- Money Purchase AA (after flexible access): £10,000
- Annual Allowance Charge: Marginal income tax rate (20%, 40%, 45%)
How to Use the Pension Annual Allowance Calculator
- Enter your salary and bonus income for the current tax year.
- Enter any other taxable income (dividends, rental, self-employment).
- Enter your employee pension contributions (gross amount).
- Enter your employer pension contributions.
- Enter any unused Annual Allowance from the previous 3 tax years.
- Review the traffic-light verdict: green means safe, amber means close to limit, red means breach with Annual Allowance Charge calculation.
Frequently Asked Questions
What happens if I exceed the Pension Annual Allowance?
Contributions above your Annual Allowance trigger an Annual Allowance Charge, taxed at your marginal rate of income tax (20%, 40%, or 45%). HMRC will either collect this through self-assessment or — for charges above £2,000 — you can ask your pension scheme to pay it directly via "Scheme Pays", with the amount deducted from your eventual pension.
How does the Tapered Annual Allowance work for high earners?
If your adjusted income exceeds £260,000, your £60,000 Annual Allowance reduces by £1 for every £2 above that threshold, down to a minimum of £10,000 at £360,000 of adjusted income. Critically, the taper only applies if your threshold income (roughly, income minus personal pension contributions) also exceeds £200,000.
Can I carry forward unused Annual Allowance?
Yes. You can add any unused Annual Allowance from the previous three tax years to your current year's limit, provided you were a member of a registered pension scheme in each of those years. You must use the current year's allowance first before dipping into carry-forward.
Does employer pension contribution count towards my Annual Allowance?
Yes. Both employee and employer contributions count towards the Annual Allowance. For defined benefit (final salary) schemes, the calculation is different — it uses the "pension input amount" based on the increase in your pension benefits over the year, not the cash contributed.
What is the Money Purchase Annual Allowance (MPAA)?
Once you have accessed any defined contribution pension flexibly (for example, taking taxable income from drawdown or an uncrystallised funds pension lump sum), your Annual Allowance for future money purchase contributions drops to £10,000. This is designed to prevent "recycling" pension tax relief.
Should I worry about the Annual Allowance if I earn under £100,000?
For most earners below £100,000 the Annual Allowance is not a practical constraint — you would need to contribute more than your entire gross salary for a year to hit £60,000. The Annual Allowance mainly affects very high earners, those using carry-forward, and people making one-off large contributions such as pension recycling after a bonus.
Related Calculators
- Retirement Pension Calculator — project your total pension pot with employer match and State Pension
- Salary Sacrifice vs Standard Pension Calculator — find the most tax-efficient way to contribute
- ISA vs SIPP Calculator — decide between ISA and SIPP for your retirement savings
Official Sources
- Pension Annual Allowance (gov.uk)
- Pension scheme rates and allowances (HMRC)
- MoneyHelper guide to Annual Allowance
Last reviewed April 2026. Figures and rules apply to the 2026/27 UK tax year. This tool is for guidance only and does not constitute financial advice.
