UK Pension Annual Allowance Calculator (Tapered)

The annual allowance is the most you can pay into your pensions each tax year while still getting tax relief. For 2025/26 the standard allowance is £60,000, or 100% of your relevant UK earnings if lower. Contributions above the allowance can trigger an annual allowance charge that claws back the tax relief.

£60,000. This covers all your pension contributions in the tax year — your own payments, any employer contributions, and the value of benefits built up in a defined-benefit (final salary) scheme. High earners may have a lower, tapered allowance, and some people are limited to the £10,000 money purchase annual allowance.

For high earners, the £60,000 allowance is gradually reduced. For every £2 your adjusted income exceeds £260,000, your annual allowance falls by £1, down to a minimum of £10,000. The taper only applies if your threshold income is also over £200,000, so both tests must be met before your allowance is cut.

Threshold income is, broadly, your total taxable income for the year minus your own pension contributions (with some adjustments). If your threshold income is £200,000 or less, the taper cannot apply no matter how high your adjusted income is. It acts as a gateway test to protect people with one-off spikes in pension input.

Adjusted income is, broadly, your total taxable income plus all pension contributions — including employer contributions and defined-benefit growth. It is the figure that drives the taper once the £200,000 threshold income gate is passed. The allowance reduces by £1 for every £2 of adjusted income above £260,000.

Adjusted income of £360,000. At that point the £50,000 reduction (from £60,000 down to £10,000) is fully applied, because £360,000 is £100,000 over the £260,000 limit and the taper removes £1 for every £2. Above £360,000 of adjusted income the allowance stays at the £10,000 floor.

Take your adjusted income, subtract £260,000, and halve the result — that is your reduction. Subtract it from £60,000 to get your tapered allowance, but never below £10,000. For example, adjusted income of £300,000 gives a £20,000 reduction, leaving a £40,000 allowance. This calculator does the arithmetic for you.

If your total pension contributions exceed your available annual allowance, the excess is added to your taxable income and taxed at your marginal Income Tax rate — 20%, 40% or 45%. This 'annual allowance charge' effectively removes the tax relief on contributions above the allowance. It is reported through Self Assessment.

Usually yes. You can carry forward unused allowance from the previous three tax years, provided you were a member of a registered pension scheme in those years. This can let you contribute more than £60,000 in a year without a charge. This calculator shows the current-year position only, so factor carry-forward in separately.

No. The threshold income test is a gateway: if your threshold income is £200,000 or less, you keep the full £60,000 allowance regardless of how high your adjusted income is. This protects people whose income only appears high because of large one-off employer pension contributions.

If you have flexibly accessed a defined-contribution pension — for example by taking taxable income from it under pension freedoms — your allowance for further money-purchase contributions is limited to £10,000, the money purchase annual allowance. This calculator models the standard and tapered allowance, not the MPAA, which is a separate restriction.

Yes. The annual allowance covers the total going into your pensions, including employer contributions and, in a defined-benefit scheme, the capitalised value of the increase in your benefits. That is why senior employees with generous employer pensions can breach the allowance even without large personal contributions.

US citizens contributing to UK pensions face both UK annual allowance rules and separate US tax treatment of those pensions. The US does not always recognise UK pension tax reliefs the same way, so a contribution that is efficient for UK tax can create US reporting and, sometimes, US tax. Cross-border pension planning is a specialist area worth advice on.

No. The lifetime allowance — a cap on total pension value — was abolished from 6 April 2024 and replaced by new lump sum allowances. The annual allowance is a separate, still-current limit on how much can go in each year. This calculator deals only with the annual allowance.

You report the excess and the charge through your Self Assessment tax return. In some cases you can ask your pension scheme to pay the charge on your behalf out of your pension benefits, known as 'Scheme Pays', which can help with cash flow. The rules and deadlines for Scheme Pays are specific, so check them carefully.

Yes — the input amount for a personal contribution is the gross figure, including the basic-rate tax relief added by the scheme. So an £8,000 net personal contribution counts as £10,000 of pension input. This matters when you are close to your allowance and are working out how much headroom you have.

Tax relief on personal contributions is limited to the higher of your relevant UK earnings or £3,600 gross. Contributing more than your earnings does not get extra relief, separate from the annual allowance. Employer contributions are not restricted by your earnings but still count toward the annual allowance.

It applies the 2025/26 standard allowance (£60,000), the taper (£1 for every £2 of adjusted income over £260,000, £10,000 floor) and the threshold income gate (£200,000) exactly as HMRC does. It does not model carry-forward, the MPAA, or the precise calculation of threshold and adjusted income, so treat the result as a well-informed estimate.

The calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

If your income is near or above the £200,000 / £260,000 thresholds, or you have US/UK cross-border pension issues, professional advice can save real money on the annual allowance charge and help you use carry-forward efficiently. Book a free 20-minute call with a TaxStone adviser.