Answers · UK 2025/26

What is the pension Annual Allowance for 2026/27?

The pension Annual Allowance for 2026/27 is £60,000 (or 100% of relevant UK earnings if lower). This covers all employer and employee contributions. Unused allowance can be carried forward 3 years. The Money Purchase Annual Allowance (MPAA) of £10,000 applies if you flexibly access a defined contribution pension.

Last updated: 28 May 2026Last reviewed: 28 May 2026How we verify

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The pension Annual Allowance (AA) is the maximum amount you (and your employer) can contribute to your pension(s) in a tax year and still receive tax relief. For 2026/27, the standard AA is £60,000. This limit covers the total of employee contributions, employer contributions and any third-party contributions across all your pension arrangements. For defined contribution pensions, the input is simply total money paid in. For defined benefit pensions, the input is calculated as 16× the growth in your annual pension accrual, plus any lump sum increase. If your contributions exceed the AA, you face an Annual Allowance Charge on the excess at your marginal Income Tax rate. Carry-forward allows you to use unused AA from the previous 3 tax years, subject to being a member of a registered pension scheme in each of those years. For 2026/27, you can carry forward unused AA from 2025/26, 2024/25 and 2023/24 (when the AA was £60,000, £60,000 and £40,000 respectively — the AA rose from £40,000 to £60,000 in April 2023). The Money Purchase Annual Allowance (MPAA) of £10,000 applies if you have flexibly accessed a defined contribution pension — for example, by taking more than the tax-free cash element as a flexible drawdown. The MPAA replaces the standard AA for money purchase pension inputs but does not apply to defined benefit accrual. Tapered Annual Allowance applies to very high earners: if your adjusted income exceeds £260,000 (2026/27), the AA tapers down by £1 for every £2 above this threshold, to a minimum of £10,000.