Pension Annual Allowance and Carry Forward (2026/27): How Much Can You Pay In?

If you’re trying to boost your pension, you’ll quickly run into a key question:

How much can I pay into my pension this tax year without getting a tax bill?

In the UK, the main limit is the Annual Allowance. For most people in 2026/27 it’s £60,000. But the rules get confusing because:

• “£60,000” isn’t always £60,000 (tapered allowance exists),
• it’s based on pension input, not “what left your bank account”,
• and you may be able to use carry forward from the previous 3 tax years.

This guide explains the rules in plain English and gives you a practical checklist.

What Is the Annual Allowance?

The Annual Allowance is the maximum amount of pension saving you can do in a tax year and still get tax relief without an Annual Allowance tax charge.

For most people in 2026/27:

• Annual Allowance: £60,000

This is across all your pensions combined (workplace pensions, SIPPs, personal pensions, etc.).

Important: It’s Not Just “Your Contributions”

The annual allowance uses something called pension input amount.

Workplace pensions (DC):

• your contributions (including salary sacrifice),
• plus employer contributions,
• plus any tax relief added by the provider.

So if you pay £20,000 and your employer pays £10,000, your pension input is £30,000.

What Counts Toward the Annual Allowance?

Defined Contribution (DC) pensions (most workplace pensions + SIPPs)

These are simple: the pension input is basically the total paid in during the tax year.

Defined Benefit (DB) pensions (final salary / career average)

These use a formula based on the increase in your promised benefits. If you’re in a DB scheme and planning big extra contributions elsewhere (like a SIPP), it’s worth double-checking with your scheme admin or adviser.

Carry Forward: The “3-Year Backdating” Rule

If you didn’t use your full annual allowance in the previous 3 tax years, you may be able to use the unused amount now. This is called carry forward.

Key points:

• You can carry forward unused allowance from the previous 3 tax years.
• You must have been a member of a UK registered pension scheme in those years (often true if you had any workplace pension).
• You still need to have enough relevant UK earnings in the current tax year to get tax relief on personal contributions.

Practical Example

You want to make a big one-off pension contribution in 2026/27.

• Annual Allowance this year: £60,000
• Unused from 2025/26: £20,000
• Unused from 2024/25: £10,000
• Unused from 2023/24: £5,000

Total potentially available in 2026/27:

• £60,000 + £20,000 + £10,000 + £5,000 = £95,000

That doesn’t mean you should do it, but it means you can (subject to earnings and taper rules).

The Two Big Gotchas People Miss

1) Your employer contributions count

If your employer is paying in a lot (or you’re using salary sacrifice heavily), you can use up your annual allowance without realising.

2) “I paid £X” is not “my pension received £X”

If you contribute to a personal pension/SIPP using relief at source, your payment is net of basic-rate tax.

• You pay £8,000
• Provider claims £2,000 from HMRC
• Pension input amount is £10,000

If you’re not sure how pension tax relief works, read: Pension Tax Relief in the UK (2026/27).

What About the Tapered Annual Allowance?

High earners can have their £60,000 annual allowance reduced by tapering.

The exact thresholds and calculations can be fiddly, and they can change, so if you suspect tapering applies to you, it’s worth checking HMRC guidance or getting advice.

A quick practical clue: if you’re a high earner and your employer pension contributions are large (or you’re making large personal contributions), do not assume you have the full £60,000 available.

What Happens If You Go Over?

If you exceed your available annual allowance (including carry forward), you may face an Annual Allowance charge. This effectively claws back the tax relief on the excess.

Depending on the size of the bill, you might be able to use Scheme Pays (your pension scheme pays the tax charge and reduces your benefits accordingly). This is more common in DB schemes but can apply in some situations.

The “How Much Should I Pay In?” Question

The allowance tells you the maximum. It doesn’t tell you the right number.

A good approach is:

1. Decide your retirement goal (income target and retirement age). 2. Work out your current saving rate (employee + employer). 3. Use a calculator to model whether you’re on track. 4. Only then consider “catch-up” contributions or one-off boosts.

You can model your pension contributions and see the year-by-year impact here: retirement calculator.

Quick Checklist Before You Make a Big Contribution

• [ ] Do I know my total pension input this tax year (including employer)?
• [ ] Am I using relief at source (so my net payment gets topped up)?
• [ ] Do I have unused allowance in the last 3 tax years (carry forward)?
• [ ] Do I have enough relevant UK earnings this year for personal contributions?
• [ ] Could tapering apply to me?
• [ ] Will this interact with other tax planning (e.g., the £100k tax trap) ?

If you’re contributing to avoid the £100k trap, this guide helps: The £100k Tax Trap.

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If you want to sanity-check how increasing contributions changes your retirement outcome, plug your numbers into the calculator and test a few scenarios: retirement calculator.