The 60-second version
Carry forward lets you add unused Annual Allowance from the previous three tax years to this year's £60,000, so a single year's pension contribution can — in the right circumstances — be as high as £240,000. Two prerequisites: you must have been a member of a UK-registered pension scheme in each year you carry forward from (membership counts even with £0 of contributions), and you must use the current year's £60k in full before the carry forward kicks in. Lookback years are then consumed in chronological order — earliest first — so allowance from a year about to expire is used before allowance from a more recent year.
The four numbers to remember in 2026/27: £60,000 standard Annual Allowance · £10,000 minimum Annual Allowance after taper · £10,000 Money Purchase AA (if triggered) · 100% of earnings as the cap on personal-contribution tax relief. Get those four right and the rest is bookkeeping.
What the Annual Allowance actually is
The Annual Allowance (AA) is the maximum gross pension contribution that can be made for you in a single tax year without an Annual Allowance charge. It applies to everything going into your pensions in that year: your own contributions, your employer's contributions, salary-sacrifice amounts, the basic-rate gross-up of any relief-at-source contribution, plus the deemed pension input amount of any defined-benefit accrual. From 6 April 2023 the standard AA has been £60,000, up from £40,000 (which was the figure for most of the previous decade).
If contributions exceed the AA in a given year, the excess is added to your taxable income for the year and taxed at your marginal rate. That's not strictly a "penalty" — you're just losing the tax relief on the excess. But it can come as an unpleasant surprise on a Self Assessment return if you've not been tracking carefully.
How carry forward works
Carry forward is the relief valve. The rule: you can carry forward unused AA from the previous three tax years and add it to the current year's £60k. Anything older than three years drops off and is gone forever. There is no way to extend the window.
The ordering rule is fixed: use the current year first, then the earliest lookback year, then the next, then the most recent. This is HMRC's design — it ensures allowance from a year about to fall outside the 3-year window gets used before more recent allowance. If you're sitting on £30k of unused allowance from 2023/24 and £30k from 2025/26, and you contribute £30k of excess this year, it's the 2023/24 allowance that gets consumed — because in 2027/28, the 2023/24 year drops off entirely.
A worked example: the £240,000 maximum
Here's the best-case scenario. Imagine someone who joined a workplace pension in 2022/23 with a nominal employer contribution but has otherwise contributed nothing to pensions while building a freelance business. In 2026/27 they have a large income event — a contract payout, a deferred bonus, the sale of a business stake — and they want to put as much as they legally can into a pension in one go.
| Tax year | AA that year | Contributions paid | Unused AA |
|---|---|---|---|
| 2023/24 (earliest lookback) | £60,000 | £0 | £60,000 |
| 2024/25 | £60,000 | £0 | £60,000 |
| 2025/26 (most recent lookback) | £60,000 | £0 | £60,000 |
| 2026/27 (current year) | £60,000 | — | £60,000 |
| Maximum contribution in 2026/27 | £240,000 | ||
That £240,000 is gross — including any tax relief and any employer match. For a higher-rate taxpayer with enough relevant earnings, contributing £240k via a SIPP would attract roughly £48,000 of basic-rate relief plus further higher-rate relief via Self Assessment. The effective net cost can be well under half the headline.
The tax-relief earnings cap is separate. Personal contributions only get tax relief up to 100% of UK relevant earnings in the same tax year (or £3,600 if higher). Carry forward lets you exceed the £60k AA — it does not let you exceed your earnings. So the £240k headline maximum only fully works as personal contributions if you have £240k+ of relevant earnings in 2026/27. If not, the workaround is to route a chunk via an employer contribution — typically a salary sacrifice of the bonus — because employer contributions aren't constrained by your earnings.
A more typical example: the bonus-year play
Most people using carry forward are not aiming for £240k. They're trying to soak up a bonus that would otherwise blow through this year's £60k Annual Allowance. Here's a representative scenario.
A higher-rate taxpayer on a £75,000 base salary makes 8% workplace contributions (employee + employer combined) = £6,000 a year going into pension. In April 2026 they receive a one-off £100,000 share-vesting payout. They want to salary-sacrifice the entire £100k bonus into the pension. Their total pension input in 2026/27 would be £6,000 + £100,000 = £106,000 — well above the £60k AA.
Carry forward to the rescue. They've been contributing £6,000 a year for years, so each of the three lookback years has £54,000 of unused AA. That's £162,000 of carry forward available. After using this year's £60k AA in full, the excess £46k is consumed from the earliest lookback year (2023/24), leaving £8k of 2023/24 still unused, plus the full £54k each from 2024/25 and 2025/26 still available for the future.
Net result: a £100k bonus moved straight into the pension at zero AA charge. They've also moved their P11 taxable salary down by £100k, saving the higher-rate income tax + employee NI on it (roughly 42% combined) and triggering the employer NI saving on top.
UK Pension Carry Forward Calculator
Enter this year's contributions plus the AA and contributions for each of the last 3 tax years. The calculator shows you exactly how much carry forward is available, in what order, with a year-by-year breakdown. Handles tapered AA for high earners and MPAA mode. No signup.
Open the calculator →The taper trap for high earners
If your adjusted income exceeds £260,000 in a given tax year (the threshold was £240,000 before 6 April 2023), your AA tapers by £1 for every £2 above £260k, to a minimum of £10,000 at adjusted income of £360,000+. The threshold income test (currently £200,000) is the let-out: if your threshold income is at or below £200,000 the taper doesn't apply, regardless of your adjusted income.
Both income measures have very specific HMRC definitions. Threshold income is roughly your taxable income minus any personal pension contributions you made by relief-at-source. Adjusted income is roughly your taxable income plus all pension contributions made for you — including your employer's contributions and any salary sacrifice. The two together create a perverse outcome: a high earner can sometimes increase their AA by making bigger personal contributions, because doing so drops their threshold income below £200k and breaks the taper.
For carry forward, the key point is that the carry forward is based on the tapered AA you had in each prior year, not the standard £60k. So a year with a £20,000 tapered AA and £15,000 of contributions gives only £5,000 of carry forward — not £45,000. The carry-forward calculator lets you override the default AA for each year specifically to handle taper cases.
The MPAA: the carry-forward killer
The Money Purchase Annual Allowance (MPAA) is the rule that catches anyone who has flexibly accessed a defined-contribution pension. Once triggered, your DC contributions are capped at £10,000 a year with no carry forward, ever. It's a one-way door.
The MPAA is triggered the first time you take taxable income from a DC pension other than via:
- The 25% tax-free cash (pension commencement lump sum)
- A scheme pension (typically only available from older personal pensions)
- Trivial commutation or small-pots lump sum
- A capped drawdown arrangement that was in place before 6 April 2015
What triggers it: flexi-access drawdown income, UFPLS, a flexible annuity, a stand-alone lump sum. Even £1 of taxable drawdown counts. This is the single biggest gotcha in UK pension planning — a £100 test withdrawal at 55 to make sure your SIPP "works" can permanently destroy your ability to top up a pension during a high-earning later career.
If you're under 60 and thinking about taking any pension money: take advice first. Pension Wise (free, government-backed) is the right starting point. The MPAA is a permanent restriction and once triggered there's no going back. Tax-free cash on its own does not trigger it — but actually taking any taxable income from drawdown does.
The membership requirement nobody tells you about
You can only carry forward from a tax year in which you were a member of a UK-registered pension scheme. Membership counts even if you made zero contributions that year — a dormant SIPP with £0 in it is sufficient. This catches:
- People moving to the UK. Arrived in 2024? You can't carry forward from 2023/24 because you weren't a member of any UK pension scheme that year.
- People who fully cashed out a small pension. If you've extracted everything and the scheme has been closed, you weren't a member at the end of the year — that year is gone for carry forward purposes.
- Some freelancers and contractors who have never set up a pension. Solution: open a SIPP today with £0 in it (most providers allow this). From the day the policy starts, you're a member, and future years' AAs are available to carry forward.
The membership requirement is checked per year. So in 2026/27 you might be able to carry forward from 2025/26 (you were a member that year) but not from 2023/24 (you weren't). The calculator above doesn't model this — it assumes you're eligible for every lookback year — so if you weren't a member in a given year, set that year's "contributions" to its full AA so the unused amount is £0.
The DB pension complication
If you accrue in a defined-benefit scheme (NHS, Teachers, Civil Service, LGPS, a final salary scheme), the "contribution" figure for AA purposes is not what you or your employer paid in — it's the pension input amount: 16 × the increase in your annual pension over the year, plus revaluation. Your scheme administrator sends you an annual pension input statement every autumn. Use that figure as the "contribution" for each lookback year.
For most NHS and Teachers members, a typical year's pension input amount is between £20,000 and £40,000 — well below the £60k AA — so carry forward is rarely needed. The exception is the year of a big promotion: a big pay rise produces a big increase in projected pension, which produces a big pension input amount, which can blow through the AA. That's the year carry forward becomes essential.
How to use carry forward correctly: the four-step process
- Check membership for each lookback year. Were you a member of at least one UK-registered pension scheme in 2023/24, 2024/25 and 2025/26? If yes, all three years are available. If no for some years, those years are off-limits.
- Gather contribution figures for each lookback year. Pension statements from every scheme — DC, DB, SIPP, AVCs. Sum the gross figures (including tax relief gross-up). For DB schemes use the pension input amount from the annual statement.
- Check this year's AA. Standard is £60,000. If your adjusted income is above £260,000, work out your tapered AA. If you've triggered the MPAA, your DC limit is £10,000 with no carry forward.
- Run the calculator. Plug in this year's AA and contributions, plus the AA and contributions for each lookback year. The result tells you the maximum you can contribute this year without an AA charge — and which lookback years would be consumed if you exceeded this year's £60k.
WealthR — the only UK net-worth tracker with a built-in carry-forward view
WealthR's pension section tracks contributions across every scheme you hold and surfaces unused Annual Allowance so you can plan carry forward at a glance — alongside ISAs, investments, property and the full FIRE forecast. Free permanent tier.
Try WealthR free →FAQ
What is pension carry forward in plain English?
What's the maximum carry forward in 2026/27?
Can I pick which lookback year to carry forward from?
Do I need to be a high earner to use carry forward?
How does the tapered AA interact with carry forward?
What happens if the MPAA was triggered?
What records do I need?
Disclaimer: This article is for general information only and is not financial, tax or pensions advice. UK pension rules — including the Annual Allowance, the tapered AA, MPAA, and carry forward — change frequently and edge cases (DB accrual, McCloud remedy, scheme pays, anti-forestalling) are not fully covered. For decisions involving significant contributions, complex pension structures, or any DB scheme, consult a regulated UK financial adviser. Rates and rules verified May 2026.