SIPP & Pension Annual Allowance Calculator (UK 2026/27)
Calculate your UK pension Annual Allowance — including tapered allowance for high earners, Money Purchase Annual Allowance, and carry-forward from prior 3 tax years.
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UK Pension Annual Allowance Guide 2026/27
What is the Annual Allowance?
The Annual Allowance is the maximum pension contribution you can make in one tax year while still receiving tax relief. Standard 2026/27 limit: £60,000 (raised from £40,000 in April 2023). This includes: your personal contributions (grossed up to include basic-rate tax relief). Employer contributions. Any tax relief HMRC adds. Defined Benefit accrual: 'pension input amount' calculated as 16 × increase in pension entitlement. Earnings limit: cannot contribute more than your annual earnings, with the Annual Allowance itself acting as the upper cap on top of that basic earnings rule.
What's the key thing to understand about Tapered Annual Allowance for High Earners?
Taper applies if BOTH conditions met: 'threshold income' over £200,000 (income excluding pension contributions). 'Adjusted income' over £260,000 (income including all pension contributions). Both must be exceeded — common misunderstanding. Taper rate: AA reduced by £1 for every £2 of adjusted income over £260,000. Minimum AA: £10,000 (for adjusted income £360,000+). 2026/27 example: adjusted income £320,000. Excess: £60,000. Taper: £30,000 reduction. AA reduced from £60,000 to £30,000. Adjusted income is broadly your total taxable income plus employer pension contributions, which is why some high earners are caught by the taper even though their salary alone looks lower than the threshold.
What should I know about Money Purchase Annual Allowance (MPAA)?
If you've flexibly accessed a defined contribution pension (taken any taxable amount beyond the 25% tax-free), MPAA is triggered. From the date of first flexible access: future Annual Allowance for DC contributions = £10,000 (not £60,000). MPAA applies for life — cannot be reversed. Does NOT affect: DB scheme contributions. Carry-forward from years before MPAA triggered. Triggers MPAA: taking taxable income via flexi-access drawdown. Taking a UFPLS (uncrystallised funds pension lump sum). Triggers MPAA: withdrawing a small pot lump sum where the whole pot is under £10,000 does NOT trigger it, unlike the other routes listed.
What do I need to know about Carry-Forward Rules?
Carry-forward lets you use unused Annual Allowance from the previous 3 tax years (after using current year first). Rules: must have been a member of a registered pension scheme in the year you carry forward from. Must use current year's full Annual Allowance before carrying forward. Carry-forward only counts if you had income in current year sufficient to support the contribution. 2026/27 carry-forward limits (this is current year + 3 back): 2021/22: £40,000 max. 2022/23: £40,000 max. 2023/24: £60,000 max — the year the Annual Allowance itself was raised from £40,000, giving a larger carry-forward opportunity from this year specifically.