UK Pension Annual Allowance Calculator
Calculate your 2025/26 pension annual allowance, check whether you have exceeded the limit, estimate any tax charge, and see how much carry forward is available from the previous three tax years. All calculations run privately in your browser — no data is sent anywhere.
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What Is the UK Pension Annual Allowance for 2025/26?
The pension annual allowance is the maximum amount you can contribute to a registered UK pension scheme in a tax year and still receive full tax relief. For 2025/26 the standard annual allowance is £60,000. This was restored from £40,000 in April 2023 as part of the Spring Budget 2023 changes aimed at encouraging older professionals to remain in or return to the workforce. The allowance covers the total of all pension contributions — your own contributions, your employer’s contributions, and any personal contributions you make directly — across all your pension schemes combined.
Breaching the annual allowance triggers an annual allowance charge, which is not technically a penalty but rather a clawback of the tax relief you have already received on the excess contributions. The charge is calculated at your marginal income tax rate (20%, 40%, or 45%) on the excess above your total available allowance. It must be declared on your self-assessment return and paid by the usual self-assessment deadline. Where the charge is £2,000 or more and certain conditions are met, you can ask your pension scheme to pay the charge on your behalf in exchange for a reduction to your pension benefits — a process known as “scheme pays.”
How Carry Forward Works — Using Previous Years’ Allowance
Carry forward allows you to use any unused annual allowance from the previous three tax years if you have already fully used this year’s allowance. For 2025/26 you can potentially carry forward unused allowances from 2022/23, 2023/24, and 2024/25. The annual allowance was £40,000 in 2022/23 and £60,000 in each of 2023/24 and 2024/25, so the maximum theoretical carry forward available in 2025/26 is £160,000 — giving a combined total allowance of up to £220,000 (plus this year’s £60,000) in exceptional circumstances.
Key carry forward rules you need to know:
- You must have been a member of a registered UK pension scheme in each year you wish to carry forward from. You do not have to have made contributions in that year — simply holding an active membership counts.
- You must fully use the current year’s annual allowance before any carry forward is applied.
- The total contributions you make in a year (including carried-forward amounts) cannot exceed your UK earnings for that year if you want full tax relief.
- Carry forward is applied to the oldest year first — 2022/23 is used before 2023/24, which is used before 2024/25.
Carry Forward Calculation
Carry forward available = (Allowance − Contributions) for each of the past 3 years
Total available allowance = This year’s allowance + sum of carry forward amounts
Excess (if any) = Total pension input this year − Total available allowance
AA charge (if excess > 0) = Excess × marginal tax rate
The Tapered Annual Allowance for High Earners
The tapered annual allowance reduces the standard £60,000 allowance for individuals with very high incomes. The taper applies only when both of the following conditions are met:
- Threshold income exceeds £200,000 — threshold income is broadly your total income before pension contributions (roughly your adjusted net income minus employer pension contributions).
- Adjusted income exceeds £260,000 — adjusted income adds employer pension contributions back to threshold income.
When both thresholds are exceeded, the annual allowance reduces by £1 for every £2 of adjusted income above £260,000. The minimum tapered allowance is £10,000. For example, if your adjusted income is £360,000, the reduction is (£360,000 − £260,000) ÷ 2 = £50,000, giving a tapered allowance of £60,000 − £50,000 = £10,000.
Taper example: adjusted income £310,000
- Adjusted income above £260,000 threshold: £310,000 − £260,000 = £50,000
- Reduction: £50,000 ÷ 2 = £25,000
- Tapered annual allowance: £60,000 − £25,000 = £35,000
The threshold income test is designed as a gate. If your threshold income is £200,000 or below, the taper does not apply regardless of adjusted income — this prevents the taper from affecting people who happen to receive a large one-off employer contribution in a single year.
How to Avoid the Annual Allowance Tax Charge
The most effective way to avoid triggering an annual allowance charge is to plan contributions carefully across tax years and make full use of carry forward. If you are approaching the limit, consider:
- Timing large employer contributions — if your employer makes a significant one-off contribution, check whether it can be spread across two tax years to keep each year within your allowance.
- Using carry forward proactively — even if you are within this year’s allowance, maximising carry forward usage in years when you have surplus income can reduce future tax exposure.
- Checking your adjusted income carefully — it is common for individuals close to the £260,000 adjusted income threshold to underestimate their position because employer contributions are often overlooked.
- Considering salary sacrifice — pension contributions made via salary sacrifice reduce your threshold income and adjusted income, which can reduce or even eliminate the taper for some high earners.
- Scheme pays elections — if you do exceed the allowance, ask your pension scheme whether a scheme pays election is available so you do not need to fund the charge from your own cash flow.
The annual allowance rules are complex and interact with many other areas of UK tax law. This calculator provides an estimate based on the figures you enter. For personalised advice, particularly if you are close to the taper thresholds or have defined benefit accrual to factor in, consult a qualified financial adviser or tax professional.