UK pension Annual Allowance rules & high-earner taper
The standard Annual Allowance is £60,000. High earners face tapering if threshold income exceeds £200,000 and adjusted income exceeds £260,000.
For every £2 of adjusted income above £260,000, your allowance falls by £1 down to a minimum of £10,000 (reached at £360,000 adjusted income). Unused allowance from the prior 3 tax years can be carried forward.
Worked example: Tapered annual allowance calculation
An executive with £210,000 threshold income and £280,000 adjusted income exceeds the £260,000 adjusted threshold by £20,000. Their allowance is tapered by £10,000 (£20,000 / 2) to £50,000. Contributing £60,000 creates a £10,000 excess unless covered by carry forward.
Inputs for the uk pension annual allowance calculator
Threshold & Adjusted Income
Threshold income is net of member contributions; adjusted income includes employer contributions.
Carry Forward
Enter unused annual allowances from the previous 3 tax years.
CALCULATOR QUESTIONS
UK pension annual allowance calculator questions
What is the tax charge on excess pension contributions?
Excess contributions are added to your taxable income and taxed at your top marginal rate (40% or 45%) via Self Assessment.
Does triggering the MPAA prevent carry forward?
Yes, once the Money Purchase Annual Allowance (£10,000) is triggered, you cannot use carry forward for defined contribution schemes.