How to Use Pension Carry Forward: Unused Annual Allowance from the Last Three Years (2026/27)

This guide is general information, not advice.

This guide is for anyone planning to put more into a pension in 2026/27 than the £60,000 annual allowance — after a bonus, a business sale, or a year when your defined benefit pension grew sharply. Carry forward lets you use allowance you left unused in the three previous tax years, so the extra savings do not trigger an annual allowance tax charge.

By the end you will have a year-by-year record of your unused allowance, a figure for how much you can pay in this year without a charge, and a clear view of what to report on Self Assessment if you still go over. For what the annual allowance is and how it interacts with the other pension limits, see the pension tax relief guide.

Before you start

• Pension savings statements for 2023/24, 2024/25 and 2025/26 from every scheme you belonged to. GOV.UK says to ask your pension providers for the pension savings figures if you have not already received them (GOV.UK). For a defined contribution pot the figure is everything paid in by you and anyone else, including your employer; for a defined benefit scheme it is the increase in your benefits (GOV.UK annual allowance).
• Proof you were a scheme member in each year you want to carry forward from. A deferred membership counts.
• Your income figures for the current year, so you can check whether the taper applies and how much of your own contribution will attract relief.
• Whether you have flexibly accessed any pension, for example taking cash from a flexi-access drawdown fund. That changes the rules (step 5).
• Your Government Gateway or GOV.UK One Login details, if you will need to file a Self Assessment return.

Step-by-step

1. Confirm the current year’s allowance first. The standard figure for 2026/27 is £60,000. GOV.UK says it is reduced (“tapered”) if both your threshold income is over £200,000 and your adjusted income is over £260,000 (GOV.UK). If both apply, work out your reduced allowance using the tapered annual allowance guide before going further. A tapered year also has a smaller allowance to leave unused.

2. Check scheme membership for each of the three earlier years. You cannot carry forward from a tax year in which you were not a member of at least one UK registered pension scheme or qualifying overseas pension scheme (GOV.UK). HMRC’s manual says membership at some point in that year is enough, whether active, pensioner, deferred or pension credit (PTM055100). A year with no membership contributes nothing.

3. Work out the unused allowance year by year. GOV.UK’s test is simple: you have unused annual allowance if your pension savings were less than your annual allowance for that tax year. Take each year’s allowance, subtract that year’s pension savings, and record the result. HMRC’s rates table shows the allowance was £60,000 for every year from 2023/24 to 2026/27 (HMRC rates). If an earlier year was tapered, use that year’s reduced allowance, not £60,000.

4. Run HMRC’s calculator to check your arithmetic. HMRC’s annual allowance calculator works out whether you went over and how much unused allowance you can carry forward. GOV.UK says you cannot use it if you are in a hybrid scheme, or if your provider accepted a flexible drawdown declaration before 6 April 2015 — do the sums by hand in that case. Our pension annual allowance calculator models the same limits.

5. Apply the money purchase annual allowance restriction if it applies to you. If you have flexibly accessed a pension, your allowance for money purchase savings is the £10,000 money purchase annual allowance in 2026/27 (HMRC rates). GOV.UK says you cannot carry forward unused money purchase annual allowance. HMRC’s manual says unused allowance from earlier years is added only to the “alternative annual allowance”, which covers your other pension savings (PTM055200). Carry forward cannot lift the £10,000 cap on money purchase contributions.

6. Use the allowances in the right order. The current year’s allowance goes first. Then GOV.UK says to use unused allowance from earlier years in order of earliest to most recent. Any allowance more than three years old falls away.

7. Check the relief limit on your own contributions. Carry forward decides whether a tax charge arises. It does not change how much of your own money gets tax relief. PTM044100 sets that at the greater of £3,600 and your relevant UK earnings chargeable to income tax for the year, and says employer contributions do not qualify for relief for the member (PTM044100). GOV.UK adds that it is up to you to make sure you are not getting relief on contributions worth more than 100% of your annual earnings (GOV.UK).

8. Make the contribution, then keep your working. Keep the statements and your year-by-year table with your tax records.

Deadlines and what happens next

If carry forward covers everything you paid in, there is no annual allowance charge. If your savings still exceed your available allowance, GOV.UK says either you or your pension provider must pay the tax, and you tell HMRC by filling in the “Pension savings tax charges” section of a Self Assessment return (GOV.UK). HMRC’s rates table says the charge is at your marginal rate of Income Tax.

Your scheme must pay the charge for you if your savings in that scheme exceed the annual allowance, the charge is over £2,000, and you tell the scheme by “31 July of the year after the following tax year”. You still report the charge on your return: box 10 for the charge, box 11 for the amount the scheme pays, and box 12 for the scheme’s Pension Scheme Tax Reference (PSTR), on the SA101 (GOV.UK). If you are not yet registered, see how to register for Self Assessment.

Common mistakes

• Carrying forward from a year with no scheme membership. That year’s allowance does not exist for carry forward.
• Using £60,000 for a year that was tapered. An earlier tapered year only leaves its reduced allowance, minus what you saved.
• Leaving out employer contributions or defined benefit growth. Both count as pension savings against the allowance.
• Assuming carry forward lifts the money purchase annual allowance. It does not.
• Paying in more than you earn personally. The annual allowance may be clear, but relief on your own contributions stops at your relevant UK earnings (or £3,600 if greater).

Worked example

Pension savings (you plus your employer) in each year, against the £60,000 allowance that applied in all four years (HMRC rates). No taper and no flexible access in any year.

Tax year	Allowance	Pension savings	Unused
2023/24	£60,000	£45,000	£15,000
2024/25	£60,000	£60,000	£0
2025/26	£60,000	£30,000	£30,000
2026/27	£60,000	£90,000	—

In 2026/27 the first £60,000 uses the current year’s allowance. The remaining £30,000 comes from the earliest year first: £15,000 from 2023/24, nothing from 2024/25, then £15,000 from 2025/26. No annual allowance charge arises.

£15,000 of the 2025/26 allowance is still unused. In 2027/28 the three earlier years will be 2024/25, 2025/26 and 2026/27, so that £15,000 remains available; 2023/24 drops out. If £80,000 of the £90,000 was your own contribution, you need relevant UK earnings of at least £80,000 in 2026/27 for all of it to get tax relief.

Related reading

• Pension annual allowance calculator
• Tapered annual allowance 2026/27
• Pension tax relief guide