What is the pension annual allowance?
The pension annual allowance is the maximum you can contribute to pensions in a tax year while still receiving tax relief. In 2025/26, the standard allowance is GBP 60,000 or 100% of earnings, whichever is lower. Contributions above this limit attract an annual allowance charge at your marginal tax rate.
What is carry forward?
If you did not use your full annual allowance in the previous three tax years, you can carry forward unused allowance and add it to the current year. You must have been a member of a registered pension scheme in the year you are carrying forward from.
What is the tapered annual allowance?
High earners with threshold income above GBP 200,000 and adjusted income above GBP 260,000 have their annual allowance tapered down. For every GBP 2 of adjusted income above GBP 260,000, the allowance reduces by GBP 1, down to a minimum of GBP 10,000.
What is the Money Purchase Annual Allowance?
The MPAA is a reduced annual allowance of GBP 10,000 that applies to defined contribution pension contributions once you have flexibly accessed your pension. It does not restrict defined benefit pension accrual.
Related calculators:
- Pension Tax Relief Calculator
- State Pension Calculator
- Take Home Pay Calculator