UK Pension Allowances 2026/27

Every annual and lump sum allowance by tax year, the taper, carry forward, and what replaced the lifetime allowance

Pension allowances by tax year

Allowance	2026/27	2025/26	2024/25	2023/24	What it limits
Standard annual allowance	£60,000	£60,000	£60,000	£60,000	The most you can put in across all your pensions in a tax year with tax relief
Money Purchase Annual Allowance (MPAA)	£10,000	£10,000	£10,000	£10,000	Replaces the annual allowance once you have flexibly accessed a pension
Taper: threshold income	£200,000	£200,000	£200,000	£200,000	Below this, the taper cannot apply however high your adjusted income is
Taper: adjusted income	£260,000	£260,000	£260,000	£260,000	The allowance starts falling once adjusted income passes this
Minimum tapered annual allowance	£10,000	£10,000	£10,000	£10,000	The floor — the taper never takes the allowance below this
Lump Sum Allowance (LSA)	£268,275	£268,275	£268,275	Did not exist	Lifetime cap on tax-free lump sums taken while you are alive
Lump Sum and Death Benefit Allowance (LSDBA)	£1,073,100	£1,073,100	£1,073,100	Did not exist	Cap on tax-free lump sums in life and on death combined
Lifetime allowance	Abolished	Abolished	Abolished	£1,073,100	Abolished on 6 April 2024 and replaced by the two allowances above
Carry forward	3 prior years	3 prior years	3 prior years	3 prior years	Unused allowance from the previous 3 tax years, if you were a scheme member then

The annual allowance counts everything paid in during the pension input period — your contributions, the tax relief added by the scheme, and anything your employer pays. Your own tax relief is separately capped at 100% of your UK relevant earnings, so a high allowance does not on its own let you contribute more than you earn.

The lifetime allowance was abolished — this is what replaced it

The lifetime allowance capped the total value of pension savings you could build before an extra tax charge applied. It was abolished on 6 April 2024. In 2023/24, its final year, the standard lifetime allowance stood at £1,073,100 — the figure most people still have in mind when they search for it. There is now no limit at all on how large a pension pot can grow.

Two narrower allowances took its place, and both cap tax-free lump sums rather than the pot itself. That is the whole shift: the old rule tested the size of your savings, the new rules test how much of them you take out free of tax.

Lump Sum Allowance — £268,275

The lifetime total of tax-free lump sums you can take while you are alive, usually 25% of each pot as you crystallise it. It is exactly 25% of the old £1,073,100 lifetime allowance, which is why the number looks so specific.

Lump Sum and Death Benefit Allowance — £1,073,100

The wider cap covering tax-free lump sums taken in your lifetime plus tax-free lump sum death benefits paid to your beneficiaries. It sits at the old lifetime allowance figure. Lump sums taken in life use up both allowances at once.

There is still no cap on the size of a pension pot

Growth above £1,073,100 no longer triggers a charge of its own. What is capped is the tax-free cash. Money drawn above an allowance is not penalised at a special rate either — it is simply taxed as income at your marginal rate, like any other pension withdrawal. If you registered for a lifetime allowance protection before it was abolished, your personal allowances are higher than the standard figures above.

Tapered annual allowance for high earners

Two income tests have to be failed before the taper applies. Your threshold income — broadly your taxable income less your own gross pension contributions — must be over £200,000, and your adjusted income — taxable income plus all pension contributions, including your employer's — must be over £260,000. If threshold income is £200,000 or less, you never need to work out adjusted income.

Once both are failed, the allowance falls by £1 for every £2 of adjusted income above £260,000, rounded down to the nearest pound, and stops falling at £10,000.

Adjusted income	Reduction	Annual allowance
£260,000	None	£60,000
£280,000	-£10,000	£50,000
£300,000	-£20,000	£40,000
£320,000	-£30,000	£30,000
£340,000	-£40,000	£20,000
£360,000	-£50,000	£10,000 (floor)
£380,000	-£50,000	£10,000 (floor)

Assumes threshold income is also above £200,000, which it will be at these levels unless most of the income is employer pension contributions. The floor of £10,000 arrives at £360,000 of adjusted income and does not fall further however much you earn. To test your own two income figures, use the Pension Annual Allowance Calculator.

Carry forward from the previous 3 years

Unused annual allowance does not disappear immediately. You can carry it forward for 3 tax years, which for 2026/27 means the years below. The current year's allowance is always used first, then the earliest year available, then the next — so the oldest slice is the one you lose if you wait.

Tax year	Annual allowance	MPAA that year	Used
2023/24	£60,000	£10,000	First, after the current year
2024/25	£60,000	£10,000	2nd in order
2025/26	£60,000	£10,000	3rd in order

Two conditions bind. You must have been a member of a UK registered pension scheme (or a qualifying overseas scheme) in each year you carry forward from, although you did not have to contribute in that year. And your own tax relief is still capped at 100% of this year's UK relevant earnings, so carry forward is mostly useful for employer contributions and for a year with an unusually large bonus. Unused MPAA can never be carried forward.

If you exceed the allowance: the annual allowance charge

There is no flat penalty. The excess above your allowance is added to your taxable income for the year as the top slice and taxed at your marginal rate — which is simply the effect of clawing back the tax relief you should not have had. The table shows the charge when the whole excess falls inside one band.

Excess over the allowance	Basic (20%)	Higher (40%)	Additional (45%)
£5,000	£1,000	£2,000	£2,250
£10,000	£2,000	£4,000	£4,500
£20,000	£4,000	£8,000	£9,000
£30,000	£6,000	£12,000	£13,500
£50,000	£10,000	£20,000	£22,500

England, Wales and Northern Ireland rates. Scottish taxpayers use the Scottish bands instead, so the top of the range is 48%. An excess that straddles two bands is split between them. You declare the charge on a Self Assessment return; if it comes to more than £2,000 and you went over the standard allowance in a single scheme, that scheme must pay it for you on request under mandatory Scheme Pays, reducing your eventual benefits instead.

Which allowance applies to you

Still paying in, income under £200,000

The standard £60,000 annual allowance, plus anything unused from the previous 3 years.

High earner, both income tests failed

A tapered allowance between £10,000 and £60,000. Carry forward still applies, and it is calculated on the tapered allowance of each earlier year, not the standard one.

Already taken taxable income from a pension

The £10,000 MPAA on money purchase savings, with no carry forward. Taking income from flexi-access drawdown, or an uncrystallised funds pension lump sum, is a trigger event. Taking only the tax-free cash is not, and neither is a lifetime annuity whose payments cannot fall.

Taking money out

The £268,275 Lump Sum Allowance caps your tax-free cash, and the £1,073,100 Lump Sum and Death Benefit Allowance caps lifetime and death lump sums together. Model a withdrawal with the Pension Drawdown Calculator.

Frequently asked questions

What is the pension annual allowance for 2026/27?

£60,000. That is the most you can pay into all your pensions in the tax year and still get tax relief, counting your own contributions, your employer's, and any tax relief added by the scheme. It can be lower: £10,000 if you have flexibly accessed a pension, or as little as £10,000 if you are caught by the taper. Your own relief is also capped at 100% of your UK relevant earnings.

What happened to the lifetime allowance?

It was abolished on 6 April 2024. For 2023/24, its last tax year, the standard lifetime allowance was £1,073,100. Two allowances replaced it, and both cap tax-free lump sums rather than the size of the pot: the Lump Sum Allowance of £268,275 and the Lump Sum and Death Benefit Allowance of £1,073,100. There is no longer any limit on how large a pension pot can grow.

How much can I take out of my pension tax free?

Usually 25% of each pot, up to a lifetime total of £268,275 — the Lump Sum Allowance. Tax-free lump sums paid in your lifetime and on your death together count against the higher Lump Sum and Death Benefit Allowance of £1,073,100. Anything above an allowance is taxed as income at your marginal rate. If you held lifetime allowance protection, your allowances are higher than the standard figures.

What is the tapered annual allowance?

If your threshold income is over £200,000 and your adjusted income is over £260,000, your annual allowance falls by £1 for every £2 of adjusted income above £260,000, down to a floor of £10,000. Both tests have to be failed: if threshold income is £200,000 or less you never need to work out adjusted income. The floor is reached at £360,000 of adjusted income.

What is the Money Purchase Annual Allowance?

£10,000 a year into defined contribution pensions, triggered once you flexibly access a pension — for example by taking an income from flexi-access drawdown or an uncrystallised funds pension lump sum. Taking only the tax-free cash is not on HMRC's list of trigger events, and neither is a lifetime annuity whose payments cannot fall. Once triggered it cannot be undone, and you cannot carry forward unused MPAA from earlier years.

How does pension carry forward work?

You can use unused annual allowance from the previous 3 tax years. The current year's allowance is used first, then the earliest of the three years, then the next. You must have been a member of a UK registered pension scheme (or a qualifying overseas scheme) in each year you carry forward from, though you did not have to contribute. Your own tax relief is still limited to 100% of this year's earnings, so carry forward mostly helps employer contributions and one-off bonuses.

What happens if I go over the annual allowance?

The excess is added to your taxable income for the year and taxed at your marginal rate, so the charge is 20%, 40% or 45% depending on which band the excess falls in (Scottish taxpayers use the Scottish rates, up to 48%). You report it on a Self Assessment return. If the charge is over £2,000 and you exceeded the standard allowance in one scheme, you can ask that scheme to pay it for you under mandatory Scheme Pays, in exchange for a reduction in your benefits.

Sources

Reflects the 2026/27 pension allowances, verified against gov.uk.

Related Calculators

Pension Annual Allowance Calculator

£60k AA, £10k MPAA, £260k taper, 3-year carry forward — check your unused allowance before exceeding the limit.

Pension Tax Relief Calculator

20% / 40% / 45% pension tax relief on contributions, with the £60k annual allowance and high-income tapering.

Pension Drawdown Calculator

Flexi-access drawdown with 25% tax-free cash + taxable income on the remaining pot, £268k LSA and state pension factored in.

Salary Sacrifice Calculator

Pension, EV lease, cycle-to-work — model gross pay reduction and the NI + tax savings from salary sacrifice arrangements.