The annual pension allowance for 2026/27 is £60,000 — but if you did not use your full allowance in previous years, you can carry the unused portion forward and contribute more this year. This is one of the most powerful (and underused) tax planning tools available.
How carry forward works
You can carry forward unused Annual Allowance from up to three previous tax years, starting with the earliest year first. You must have been a member of a registered pension scheme in each year you want to carry forward from (even if contributions were zero).
The current year's allowance is always used first. Only when your contributions exceed the current year's £60,000 allowance do the carried-forward amounts come into play.
Annual Allowance history
- 2023/24: £60,000
- 2024/25: £60,000
- 2025/26: £60,000
- 2026/27: £60,000
If you contributed nothing in the three previous years and were a pension scheme member throughout, you could contribute up to £240,000 in 2026/27 (£60,000 × 4 years) without exceeding the allowance — subject to having sufficient earnings to support the contribution.
The earnings cap
Tax relief on pension contributions is limited to your relevant UK earnings in the tax year. If you earn £80,000, you can only get tax relief on contributions up to £80,000 — even if your carry forward headroom is larger. Employer contributions count towards the Annual Allowance but are not limited by your earnings.
Who benefits most from carry forward?
- Higher earners who received a bonus or windfall — use carry forward to shelter a large sum in one go
- People in the £100K–£125K trap — a large pension contribution can restore the Personal Allowance entirely
- Freelancers with variable income — low-income years build up unused allowance that can be used in a high-income year
How to claim the tax relief
Basic rate relief (20%) is added automatically by your pension provider. Higher and additional rate relief must be claimed through Self-Assessment. Declare the total contribution on your tax return and HMRC will extend your basic rate band and (if applicable) restore your Personal Allowance.
Model the impact
Use the pension tax relief calculator to see how a large contribution affects your tax bill, or the main calculator to model the effect on your overall take-home pay.