Tax year 2026/27Last updated 8 October 2026
Pension allowances
How much you can save into a pension each year with tax relief, and what happens if you have already taken some pension benefits.
Key allowances
| Allowance | Value |
|---|---|
| Standard annual allowance | £60,000 |
| Tax relief limited to | 100% of relevant earnings (3,600 for non-earners in some schemes) |
| Money Purchase Annual Allowance (MPAA) | £10,000 |
| Carry forward | Unused allowance from up to 3 previous tax years |
| Tax-free cash | 25% of the pot, up to £268,275 |
- The lifetime allowance was abolished from April 2024; tax-free cash is capped at £268,275 instead.
- If you have flexibly accessed a defined contribution pension, the MPAA of £10,000 replaces the standard allowance for all further money purchase contributions.
Tapered annual allowance
| Test | Threshold |
|---|---|
| Threshold income | £200,000 |
| Adjusted income | £260,000 |
| Reduction | £1 of allowance for every £2 of adjusted income above £260,000 |
| Minimum tapered allowance | £10,000 |
- The taper only applies if both threshold income and adjusted income exceed their limits.
Common questions
What is the pension annual allowance?
£60,000 for most people, reduced between £10,000 and £60,000 for very high earners under the taper, and £10,000 if you have already flexibly accessed a money purchase pension (MPAA).
Can I use unused allowance from earlier years?
Yes, up to three previous tax years of unused allowance can be carried forward, subject to the MPAA rules and your earnings.
Figures from Pension schemes rates and allowances . For guidance only, not tax advice. Always check current HMRC guidance.
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