The UK Pension Annual Allowance Explained: £60,000, the Taper, and Carry-Forward
The UK pension annual allowance is £60,000 this tax year (HMRC), covering all your private pensions together. High earners face a taper once threshold income passes £200,000 and adjusted income passes £260,000, and unused allowance can be carried forward from the previous 3 tax years.
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Open calculatorWhat the annual allowance is
The pension annual allowance sets how much can go into your pensions each tax year. This is £60,000 this tax year (gov.uk).
The limit is per person, not per pot. Your annual allowance applies to all of your private pensions, if you have more than one (gov.uk).
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Carry-forward — using earlier years' unused allowance
The allowance does not strictly expire year by year. You might be able to carry over any annual allowance you did not use from the previous 3 tax years (gov.uk).
That matters most for people with uneven income — a business sale, a bonus year, a partnership distribution — who want to make one large pension contribution against several years of accumulated headroom.
The taper for high earners
Your annual allowance might be lower if you have a high income (gov.uk).
The reduction has a precise double gate. You'll have a reduced ('tapered') annual allowance in the current tax year if both: your 'threshold income' is over £200,000 and your 'adjusted income' is over £260,000 (gov.uk).
Both conditions must hold — income over £200,000 alone does not trigger the taper if adjusted income stays at or under £260,000 (gov.uk). Anyone checking earlier years should note: the threshold income and adjusted income limits are different for earlier tax years (gov.uk).
After flexibly accessing a pension
Your annual allowance might be lower if you have flexibly accessed your pension pot (gov.uk). The lower allowance is called the 'money purchase annual allowance' (gov.uk).
This is the rule that catches people who draw from a pension early and keep contributing afterwards — the room for further tax-relieved saving shrinks once flexible access has happened.
Going over the allowance
If you go over your annual allowance, either you or your pension provider must pay the tax (gov.uk).
A note on scope
This page covers the published HMRC rules: the £60,000 annual allowance (gov.uk), the all-pensions-combined scope (gov.uk), the 3-year carry-forward (gov.uk), the £200,000/£260,000 taper gates (gov.uk), the money purchase annual allowance (gov.uk), and the tax charge on excess (gov.uk).
The tapered allowance's rate of reduction, its floor, and the money purchase allowance's amount sit outside this page's quoted source. UK Calculator provides information and tools, not regulated financial advice — pension contribution decisions interact with income tax, employer schemes and retirement timing, and a regulated financial adviser is the right person to assess any individual case.
Frequently asked questions
How much is the pension annual allowance?
This is £60,000 this tax year (gov.uk).
Does each pension get its own allowance?
No. Your annual allowance applies to all of your private pensions, if you have more than one (gov.uk).
Can I use unused allowance from earlier years?
You might be able to carry over any annual allowance you did not use from the previous 3 tax years (gov.uk).
When does the taper apply?
If both your 'threshold income' is over £200,000 and your 'adjusted income' is over £260,000 (gov.uk).
What happens after I flexibly access a pension?
Your annual allowance might be lower (gov.uk) — the lower allowance is called the 'money purchase annual allowance' (gov.uk).
What if I go over the allowance?
If you go over your annual allowance, either you or your pension provider must pay the tax (gov.uk).
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