Pension Annual Allowance Calculator 2026/27
Enter your threshold and adjusted income to see your annual allowance — £60,000 as standard, tapered by £1 for every £2 of adjusted income over £260,000, to a £10,000 floor.
How it works
The standard annual allowance is £60,000 in 2026/27 — the most that can go into your pensions each year (your contributions, employer contributions and tax relief combined) without a tax charge.
The taper needs two figures: THRESHOLD income (broadly, taxable income minus your own pension contributions) and ADJUSTED income (taxable income plus employer pension contributions). If threshold income is over £200,000 AND adjusted income is over £260,000, your allowance shrinks by £1 for every £2 above £260,000, down to a £10,000 minimum at £360,000+.
A worked example: enter threshold income of £210,000 and adjusted income of £300,000. Both tests are breached, so the taper bites: the excess over £260,000 is £40,000, the reduction is half of that (£20,000), and the result is a £40,000 annual allowance. Push adjusted income to £360,000 or beyond and the reduction reaches its maximum — the allowance floors at £10,000 and falls no further.
The two-test design has an escape hatch worth checking before anything else: if threshold income is £200,000 or less, there is NO taper at all, no matter how large adjusted income is. This is why the calculator asks for both figures — a large employer contribution can inflate adjusted income dramatically while threshold income stays under the line, leaving the full £60,000 intact.
If you have flexibly accessed a defined-contribution pension (e.g. drawdown income or a UFPLS), the Money Purchase Annual Allowance of £10,000 applies to DC savings instead — and carry-forward cannot be used for DC contributions. Otherwise, unused allowance from the previous 3 tax years can be carried forward on top of this year’s allowance.
Common mistakes with this calculation: forgetting that the allowance counts EVERYTHING going into your pensions — employer contributions and the tax relief added to your own payments, not just what leaves your bank account; mixing up the two income definitions (your own contributions are deducted for threshold income, employer contributions are added for adjusted income); and assuming that taking the 25% tax-free lump sum triggers the MPAA — it does not, only flexible taxable access does.
What the result is — and is not: the calculator gives your annual allowance for 2026/27 under the standard rules and the taper. It does not compute the annual allowance charge itself (the excess over your allowance is added to your taxable income), and it cannot verify your carry-forward history — for that you need your actual contribution records for the previous three tax years.
FAQ
What is the pension annual allowance for 2026/27?
£60,000 for most people — unchanged since April 2023. This covers everything paid into your pensions in the tax year: your own contributions, the tax relief added to them, and anything your employer pays in. Going over it doesn’t stop the contributions, but the excess is added to your taxable income through the annual allowance charge unless you have carry-forward available.
What is the difference between threshold income and adjusted income?
Threshold income is roughly your total taxable income MINUS pension contributions you pay personally; adjusted income is taxable income PLUS employer pension contributions. The two-test design stops people dodging the taper by swapping salary for employer contributions. If threshold income is £200,000 or less you escape the taper entirely, no matter how large adjusted income is.
How does carry-forward work?
You can add unused annual allowance from the previous three tax years — for 2026/27 that means 2023/24, 2024/25 and 2025/26, each with a £60,000 allowance. You must have been a member of a registered pension scheme in those years, and you use the current year’s allowance first, then the oldest carried-forward year. In theory a maximum of £240,000 could be contributed in one year.
What triggers the £10,000 MPAA?
Flexibly accessing a defined-contribution pension: taking taxable drawdown income, a UFPLS lump sum, or exceeding the cap on a capped-drawdown plan. Taking only the 25% tax-free lump sum does NOT trigger it. Once triggered, DC contributions above £10,000 a year attract a charge and carry-forward can no longer be used for DC savings — a major trap for people who dip into a pension while still working.
My adjusted income is £300,000 — what is my annual allowance?
Assuming threshold income is also over £200,000: £40,000. The excess of adjusted income over £260,000 is £40,000, and the allowance falls by £1 for every £2 of excess — a £20,000 reduction from the standard £60,000. If your threshold income is £200,000 or below, however, the taper never engages and you keep the full £60,000 despite the high adjusted figure.
Do employer pension contributions count towards the £60,000?
Yes — the annual allowance measures everything entering your pensions in the tax year: your own contributions, the tax relief added to them, and every pound your employer pays in. A generous employer scheme can therefore consume a large slice of the allowance before you contribute anything yourself. Employer contributions are also precisely what gets added back when calculating adjusted income for the taper.
What happens if I go over my annual allowance?
The contributions still stand — nothing is refused or returned — but the excess is added to your taxable income through the annual allowance charge, which claws back the tax relief on it. Before any charge applies, though, check carry-forward: unused allowance from the previous three tax years can absorb the excess entirely, and many apparent breaches disappear once those years are counted.
At what income do I hit the £10,000 minimum allowance?
At adjusted income of £360,000 or more (with threshold income above £200,000). The arithmetic: £360,000 is £100,000 over the £260,000 trigger, and half of that — £50,000 — is the maximum reduction, taking £60,000 down to the £10,000 floor. Beyond £360,000 nothing further happens; the allowance never tapers below £10,000 however large the income.