UK Pension Annual Allowance 2026/27
UK pension annual allowance 2026/27 - work out your allowance from adjusted and threshold income, with the high-earner taper and the £10,000 MPAA.
Worked scenarios
- Adjusted £180,000£60,000Standard annual allowance £60,000; neither MPAA nor high-earner taper applies.
- Adjusted £260,000 (taper threshold)£60,000Standard annual allowance £60,000; neither MPAA nor high-earner taper applies.
- Adjusted £300,000£40,000Adjusted income £300,000 exceeds the £260,000 taper trigger; allowance reduced by £1 per £2 of excess (floor £10,000).
- Adjusted £360,000 (full taper)£10,000Adjusted income £360,000 exceeds the £260,000 taper trigger; allowance reduced by £1 per £2 of excess (floor £10,000).
- Adjusted £400,000 (floor)£10,000Adjusted income £400,000 exceeds the £260,000 taper trigger; allowance reduced by £1 per £2 of excess (floor £10,000).
- MPAA triggered£10,000Money Purchase Annual Allowance is £10,000 once a member has flexibly accessed a DC pension.
How the taper works
- Work out adjusted income: start with net income, then add pension contributions taken from your pay before tax (net pay arrangement), contributions you claim relief on yourself, and everything your employer paid in for you, including salary given up under salary sacrifice.
- Work out threshold income: start with net income, deduct the gross amount of relief-at-source contributions, and add back salary given up for pension under a salary sacrifice or flexible remuneration arrangement made after 8 July 2015.
- The taper applies only if adjusted income is over £260,000 and threshold income is over £200,000.
- You lose £1 of the £60,000 allowance for every £2 of adjusted income above £260,000.
- The allowance cannot fall below £10,000, reached at £360,000 of adjusted income.
For example: at adjusted income £300,000 with threshold income £290,000, the taper takes £20,000 off the standard allowance, leaving £40,000. At adjusted income £350,000 it takes £45,000, leaving £15,000. At £360,000 or more the £10,000 minimum applies.
Once you have flexibly accessed a defined-contribution pension, contributions to defined-contribution schemes are limited to the £10,000 money purchase annual allowance, and defined benefit savings have an alternative allowance of £50,000. Unused allowance from the previous 3 tax years can be carried forward, but unused MPAA cannot. This calculator does not model carry forward.
Sources (2026/27, checked 1 October 2026): gov.uk: Annual allowance, Work out your reduced (tapered) annual allowance, Check if you've gone above the money purchase annual allowance, Check if you have unused annual allowances and Finance Act 2004 s.237B (Scheme Pays).
Related calculators
Other UK tax calculators that pair with the Annual Allowance.
Frequently asked questions
What is the UK pension annual allowance for 2026/27?
The standard annual allowance is £60,000 in 2026/27. It is the most pension savings (contributions by you, your employer or anyone else, plus any increase in a defined benefit pension) you can build up in a tax year before a tax charge applies. Savings above it, after any unused allowance carried forward, are added to your income and taxed at your rate through Self Assessment.
When does the high-earner taper apply?
The taper applies in 2026/27 only if both your threshold income is over £200,000 and your adjusted income is over £260,000. Your allowance then falls by £1 for every £2 of adjusted income above £260,000, to a minimum of £10,000, reached at £360,000 of adjusted income.
What is adjusted income vs threshold income?
Both start from your net income. Adjusted income adds back pension contributions taken from your pay before tax (net pay), your employer's contributions for you (including salary given up under salary sacrifice) and any contributions you claim relief on yourself. Threshold income deducts the gross amount of relief-at-source contributions and adds back salary given up for pension under a salary sacrifice arrangement made after 8 July 2015.
What is the Money Purchase Annual Allowance (MPAA)?
The MPAA is £10,000 in 2026/27 (it was £4,000 before April 2023). It applies once you flexibly access a defined-contribution pension, for example by taking an uncrystallised funds pension lump sum or taking income from flexi-access drawdown. Taking only the tax-free lump sum does not trigger it. Defined benefit savings then have an alternative annual allowance of £50,000.
Can I carry forward unused allowance?
Yes - you can carry forward unused allowance from the previous 3 tax years, earliest year first, if you were a member of a registered pension scheme in each of those years. The unused amount for a year is measured against the allowance that applied to you that year, so a tapered year leaves less to carry forward. Unused MPAA cannot be carried forward.
What happens if I exceed the allowance?
The excess is added to your income and taxed at your rate (the annual allowance charge), reported on your Self Assessment return. You can ask a scheme to pay the charge from your pension ('Scheme Pays') if the charge is over £2,000 and your savings in that scheme alone exceed the standard £60,000 allowance (Finance Act 2004 s.237B).