Calculators
Pension annual allowance calculator
For higher earners: whether the taper reduces your allowance this year, how much room is left, and what any excess would cost.
What this means
How it works
How the tapered allowance works
Most people can have up to £60,000 a year paid into their pensions. For those with the highest incomes the limit is reduced, and because employer contributions count towards the test, it is possible to breach it without paying in a penny yourself.
The taper applies only if both of these are true:
- your threshold income is more than £200,000, and
- your adjusted income is more than £260,000.
When it applies, the allowance falls by £1 for every £2 of adjusted income above £260,000. Someone with adjusted income of £300,000 has an allowance of £40,000; at £360,000 or more it is £10,000.
Why the threshold test matters
Threshold income is measured after deducting your own pension contributions. That creates a planning point: a personal contribution large enough to bring threshold income down to £200,000 switches the taper off altogether, whatever your adjusted income. Carry forward of unused allowance from earlier years is often what makes a contribution of that size possible.
Defined benefit schemes
If you are in a final salary or career average scheme, what counts is not the contributions paid but the growth in the value of your benefits over the year, worked out by a set formula. Your scheme sends a pension savings statement if you exceed the standard allowance. This calculator is designed for defined contribution pensions; an adviser can combine the two.
Getting it right before 5 April
The taper is assessed on the whole tax year, and bonuses, share awards and rental income often are not known until late. An adviser can estimate both income measures during the year, use carry forward in the right order, and decide whether a contribution is better made by you, by your employer, or deferred.
Questions
Annual allowance questions
What is the pension annual allowance?
It is the most that can be paid into your pensions in a tax year, by you and your employer together, before a tax charge applies. For 2026/27 the standard allowance is £60,000. Your own contributions are also limited to 100% of your earnings for tax relief.
When does the taper apply?
Only when two tests are both met: your threshold income is above £200,000 and your adjusted income is above £260,000. The allowance then falls by £1 for every £2 of adjusted income over £260,000, down to a minimum of £10,000 once adjusted income reaches £360,000.
What is the difference between threshold income and adjusted income?
Threshold income is broadly your taxable income less your own pension contributions, with any salary given up through a salary sacrifice arrangement added back. Adjusted income is broadly your taxable income plus everything your employer pays into your pension. The first decides whether the taper can apply at all; the second decides how much allowance you lose.
What is carry forward?
If you did not use your full allowance in any of the previous three tax years, and you were a member of a pension scheme in those years, the unused amount can be added to this year's allowance. The current year is used first, then the earliest of the three previous years.
What happens if I go over?
The excess is added to your income and taxed at your marginal rate, which cancels the tax relief. You report it on your self-assessment return. In many cases you can ask your pension scheme to pay the charge out of your pension, known as scheme pays. Schemes must agree where the charge is over £2,000 and your savings in that scheme alone exceeded the standard £60,000 allowance; otherwise it is at their discretion.
What is the money purchase annual allowance?
Once you have taken taxable income flexibly from a defined contribution pension, for example through drawdown, the amount you can pay into defined contribution pensions falls to £10,000 a year and carry forward is no longer available for those contributions. Taking only tax-free cash does not trigger it.
The taper is easier to plan for than to fix afterwards.
Book a complimentary video consultation with an FCA-regulated adviser who works with higher earners, and check your position before the tax year ends. No obligation.