What are the pension carry forward rules?

Your pension annual allowance is the maximum you can contribute to your pensions in a tax year before a potential tax charge applies. The current 2026/2027 tax year limit for most people is £60,000, but yours may be slightly different depending on your income. ^{Footnote [1]}It’s also a total amount across all your pensions, so you don’t have individual annual allowances per pension. If you’re not sure what your annual allowance is, then you can check with your financial adviser or the Gov website.

You also have two other allowances: the pension tapered annual allowance and the Money Purchase Annual Allowance (MPAA). Your pension tapered annual allowance refers to the gradual reduction of your annual allowance. But this only applies to people whose income exceeds a certain threshold. Your MPAA applies when you have taken taxable benefits from any defined contribution pensions as either a lump sum or income drawdown. Once you’ve triggered MPAA, your annual allowance  reduces to £10,000.

Carry forward lets you use any unused annual allowance from the previous three tax years to increase your contributions in the current year. ^{Footnote [2]} However, if you trigger the MPAA, carry forward can’t be used to increase the MPAA limit for contributions to money purchase pensions.

Carry forward can be especially useful for those who:

• have irregular income.
• can only contribute in lump sums.
• are self-employed.

Eligibility depends on several factors:

• you must be a member of a UK registered pension scheme; this applies to all of the years you want to carry forward.
• you must have enough earnings in the current tax year to cover contributions, other than employer contributions.
• if you have triggered MPAA in a particular year, you can’t carry forward any allowance.
• if you weren’t a scheme member in a particular year, you won’t be able to carry over the allowance from that year. 

You don’t have to formally apply for carry forward. All you need to do is make the pension contribution. You will need to make sure you use your current year’s allowance first, and then you can use your unused allowances from previous years starting with the oldest. You’ll then need to report any excess charge on your Self-Assessment tax return, so make sure you keep a clear record of your calculations. ^{Footnote [3]}  

To check if you have any unused allowance, you can check with your financial adviser, or use the gov.uk pension annual allowance calculator.

Example of carry forward

Sarah is a 42-year-old marketing consultant, earning £150,000 a year. She decides in 2026/2027 to make a large pension contribution to support her long-term financial retirement goals. 

She’s already contributed £20,000 to her pension through her employer during the year, so she has £40,000 of this year’s allowance remaining.

Her previous three years contributions were:

This means she’s able to carry forward a total of £130,000.

She decides that she wants to make a £100,000 personal lump-sum contribution, which after tax relief becomes £125,000.

So, because of the rules, she has to use all of her allowance for this current year and then go back to the earliest of the three years. This looks like:

• 2026/2027– £40,000 available after her employer's contribution - used in full
• 2023/2024 – full £50,000 used
• 2024/2025– Sarah uses £35,000 of this.

She doesn't need to touch her remaining 2025/2026 allowance, which she can draw on next year if she has the earnings to support the contribution. And she can also use the other £10,000 still available from 2024/2025.