Annual & tapered allowance checker
The standard pension annual allowance is £60,000 for most people. It tapers from £260,000 adjusted income down to a floor of £10,000, and the Money Purchase Annual Allowance is also £10,000, per gov.uk. This checks whether the taper applies and whether a charge is likely.
Your planned contribution is £10,000 over the allowance. Check carry-forward from the last three tax years before assuming a charge is due.
How does the pension annual allowance and its taper work?
The annual allowance is the cap on pension saving that still attracts tax relief each year, per gov.uk. It counts personal contributions, employer contributions and, for a defined benefit scheme, the growth in the promised pension. For most people it is £60,000. Two rules can lower it: the high-income taper, and the Money Purchase Annual Allowance once a pot has been flexibly accessed.
The taper applies only when threshold income is over £200,000 and adjusted income is over £260,000, per gov.uk guidance on the tapered annual allowance. Both tests must be met before the taper bites. Once they are, the allowance falls by £1 for every £2 of adjusted income above £260,000. The floor is £10,000, reached once adjusted income hits £360,000.
| Standard annual allowance (2026/27) | £60,000 |
|---|---|
| Taper starts (adjusted income) | £260,000 |
| Minimum tapered allowance | £10,000 at £360,000 adjusted income |
| Money Purchase Annual Allowance | £10,000 |
What is an example of the tapered annual allowance in action?
Consider someone with threshold income of £220,000 and adjusted income of £290,000. Both gates are passed, so the taper applies. Adjusted income is £30,000 above the £260,000 threshold set out by gov.uk. That excess cuts the allowance by half of itself, £15,000. The available allowance is therefore an estimated £45,000. A planned £55,000 of pension saving would be £10,000 over that limit, so a charge is likely unless carry-forward from earlier years covers the excess.
What happens if I exceed the annual allowance?
- Check carry-forward. Unused allowance from the previous three tax years can be added to this year, and it often removes the charge entirely.
- Get the income figures right. Threshold and adjusted income have precise rules on what counts, per gov.uk. A small change can move a case across a gate.
- Report through Self Assessment. Where a charge applies, it is declared on the tax return, and in some cases the scheme can pay it instead.
Common questions
What is the annual allowance for 2026/27?
The standard annual allowance is £60,000. This is the most you can normally pay into pensions each year, across all your contributions and any employer pays in, while still getting tax relief.
When does the tapered annual allowance apply?
The taper only applies if your threshold income is above £200,000 and your adjusted income is above £260,000. If either test is not met, you keep the full £60,000.
How much does the taper reduce my allowance?
For every £2 of adjusted income above £260,000, your allowance drops by £1. It stops falling at £10,000, which is reached once adjusted income hits £360,000.
What is the difference between threshold income and adjusted income?
Threshold income is broadly your taxable income less your own pension contributions. Adjusted income adds back pension contributions, including what your employer pays in. The two-part test stops someone with modest take-home but a large employer contribution from being caught unfairly.
Can I carry forward unused allowance?
Usually yes. If you have not used your full allowance in the previous three tax years and you were a member of a registered pension scheme in those years, you can carry the unused amount forward. This can cover a contribution above this year’s allowance and avoid a charge.
What is the Money Purchase Annual Allowance?
If you have flexibly accessed a defined contribution pension, for example by taking taxable income from it, your allowance for future DC saving is capped at the MPAA of £10,000, and you cannot use carry forward for it.
How does the pension annual allowance and its taper work?
The standard annual allowance is £60,000 for most people, per gov.uk. It tapers when threshold income exceeds £200,000 and adjusted income exceeds £260,000. The allowance then falls by £1 for every £2 of adjusted income above that limit, down to a floor of £10,000.
What is an example of the tapered annual allowance in action?
Someone with threshold income of £220,000 and adjusted income of £290,000 passes both taper tests. Their adjusted income sits £30,000 above the £260,000 limit, which cuts the allowance by £15,000 to £45,000. A planned £55,000 pension contribution would then be £10,000 over the reduced allowance, unless carry-forward covers the excess.
What happens if I exceed the annual allowance?
Exceeding the available allowance can trigger an annual allowance charge, which is estimated through Self Assessment and effectively claws back the tax relief given on the excess. Before assuming a charge applies, unused allowance from the previous three tax years is worth checking, since carry-forward often removes the charge entirely. In some cases the pension scheme can pay the charge instead.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.