UK 2028 Tapered Annual Allowance
UK 2028 Tapered AA: £60k standard tapers £1 per £2 above £260k adjusted income. Floor £10k at £360k AI. Both threshold (>£200k) + adjusted (>£260k) tests apply.
| Threshold income | — |
| Adjusted income | — |
| Tapered Annual Allowance | — |
| Allowance lost to taper | — |
The UK 2028 Tapered Annual Allowance reduces the standard £60,000 pension AA for high earners. Two-part test: threshold income > £200,000 AND adjusted income > £260,000. Above both, AA loses £1 per £2 of adjusted income above £260,000. Floor £10,000 reached at adjusted income £360,000+.
Two-Part Test
Threshold income (broadly: total taxable income minus your personal pension contributions) > £200,000 AND adjusted income (threshold + employer pension contributions) > £260,000. Both must apply. Below £200k threshold = full £60k AA regardless of employer contributions. Critical: salary sacrifice into pension does NOT reduce adjusted income for taper purposes.
Carry-Forward Unused AA
3-year carry-forward of unused AA — chronological order, oldest first. Must have been UK pension scheme member in those years. Lump-sum makeup payments in low-AI years can offset tapered years. For senior professionals, can save tens of thousands per year.
MPAA Trap
Once you flex-access a defined contribution pension, the Money Purchase Annual Allowance applies = £10,000 for DC contributions (Tapered AA still applies to DB accruals). Pre-retirement flex-access has long-tail AA consequences. Get advice before drawing down.
Last updated May 2026. Sources: HMRC Tapered AA.