The pension carry forward rule allows you to make a larger pension contribution in the current tax year by using unused allowance from the previous three years. In 2026/27, a maximum of £240,000 could be contributed in a single year — though in practice, the 100% of earnings cap means the actual limit is usually much lower.
This is one of the most powerful but least understood rules in UK pension tax planning. Here is a complete guide to how it works.
What Is the Annual Allowance in 2026/27?
The pension annual allowance is the maximum you can contribute to all your registered pension schemes in a tax year while still receiving tax relief. In 2026/27, the annual allowance is £60,000 (or 100% of your earnings, whichever is lower).
| Allowance type | 2026/27 limit |
|---|---|
| Standard annual allowance | £60,000 |
| Money Purchase Annual Allowance (MPAA) | £10,000 |
| Tapered annual allowance (high earners) | £10,000–£60,000 |
If your employer contributes to your pension, those contributions count towards the £60,000 limit too — it is the total going in across all sources.
How Carry Forward Works
Carry forward lets you top up this year’s £60,000 allowance with any unused allowance from the three previous tax years.
The rules:
- You must have been a member of a registered pension scheme in the year you want to carry forward from (even if you made no contributions)
- You must use the current year’s full allowance first before dipping into carry forward
- You use the oldest year’s carry forward first
- Total contributions still cannot exceed 100% of your annual earnings
- Carry forward cannot be used to increase the MPAA if you have flexibly accessed your pension
Years available to carry forward from in 2026/27:
| Tax year | Standard annual allowance | If you contributed £X, carry forward available |
|---|---|---|
| 2023/24 | £60,000 | £60,000 − contributions in 2023/24 |
| 2024/25 | £60,000 | £60,000 − contributions in 2024/25 |
| 2025/26 | £60,000 | £60,000 − contributions in 2025/26 |
| 2026/27 | £60,000 | Current year — use first |
Worked Example: Sarah, Earns £120,000
Sarah is a senior manager earning £120,000 a year. She has been a member of her employer’s workplace pension scheme throughout but made modest contributions in recent years due to other financial priorities.
Her contribution history:
| Tax year | Contributed | Annual allowance | Unused allowance |
|---|---|---|---|
| 2023/24 | £10,000 | £60,000 | £50,000 |
| 2024/25 | £20,000 | £60,000 | £40,000 |
| 2025/26 | £15,000 | £60,000 | £45,000 |
| 2026/27 | — | £60,000 | Current year |
Total carry forward available: £50,000 + £40,000 + £45,000 = £135,000
Maximum Sarah can contribute in 2026/27:
- Current year allowance: £60,000
- Plus carry forward: £135,000
- Combined: £195,000
But: contributions cannot exceed 100% of earnings = £120,000
Sarah decides to make a pension contribution of £120,000 in 2026/27. This is fully within the rules.
She uses:
- 2026/27 allowance: £60,000
- Carry forward from 2023/24 (oldest first): £50,000
- Carry forward from 2024/25: £10,000 (only £10,000 needed of the £40,000 available)
Tax relief on the contribution:
- Basic rate relief is claimed at source (the pension provider adds 25% to her net contribution)
- She must claim higher rate relief (40%) on the contribution via self-assessment
- On £120,000 contributed: £48,000 additional tax relief via self-assessment (above the basic rate already added)
Why Would You Use Carry Forward?
Carry forward is most valuable when:
- You receive a large bonus or windfall and want to shelter income from tax
- You are selling a business and want to offset a large capital gain with pension contributions
- You are approaching retirement and want to maximise your pot in the final working years
- You were low-earning in previous years (maternity leave, study) but now earn more
- Your employer contributes a large amount and you want to add personally on top
It is particularly powerful for additional rate taxpayers (45%), where pension contributions effectively attract 45p back in tax relief for every £1 contributed.
Carry Forward and the Tapered Annual Allowance
High earners with adjusted income above £260,000 have a tapered annual allowance — reduced by £1 for every £2 of adjusted income above the threshold, down to a minimum of £10,000.
If you were subject to tapering in a previous year, the carry forward from that year is based on that year’s reduced allowance — not the standard £60,000. This makes the calculation more complex and a tax adviser is recommended.
What About the MPAA?
If you have flexibly accessed a defined contribution pension — for example, by taking income from a drawdown fund or taking a partial UFPLS — the Money Purchase Annual Allowance (MPAA) of £10,000 applies to your money purchase (DC) contributions. Carry forward cannot increase the MPAA.
The standard £60,000 carry forward rules continue to apply to defined benefit (DB) pension input, if you have any.
How to Claim Tax Relief on Large Contributions
- Basic rate taxpayers: Relief is claimed at source by the pension provider
- Higher and additional rate taxpayers: Claim additional relief via self-assessment
- Employer contributions: No action needed — employer contributions receive relief automatically
If your contribution via carry forward takes your total pension input well above what your payroll handles, contact HMRC or include it on your self-assessment return to claim the full relief.
Related Guides
For the full picture on pension tax rules, see our guides on pension annual allowance 2026/27, how pension tax relief works, SIPP guide, and the pension carry forward overview.
Summary
Carry forward is a legitimate and HMRC-endorsed way to make a much larger pension contribution than the standard £60,000 annual allowance. In 2026/27, you can carry forward up to £135,000 of unused allowance from 2023/24, 2024/25, and 2025/26 — provided you were in a registered pension scheme in those years. Your total contribution is still capped at 100% of your annual earnings. Used correctly, this is one of the most effective ways to reduce a high tax bill while building retirement savings.