This case study is for financial advisers only. It mustn't be distributed to, or relied on by, customers. It is based on our understanding of legislation as at 21 April 2026.
You can find out more about the carry forward rules in our technical guide. The case studies below look at examples of carrying forward unused allowances into the 2026/27 tax year.
Case studies
John is not affected by the tapered annual allowance (TAA) or the money purchase annual allowance (MPAA) and is looking to contribute £80,000 in 2026/27. His total contributions for the last three tax years are:
- 2023/24 – £40,000
- 2024/25 – £50,000
- 2025/26 - £80,000
To calculate how much he can carry forward, we need to look at the amounts used up in the previous three years:
Tax year |
Annual allowance (AA) |
Total pension input amount |
AA available to carry forward |
Cumulative total |
|---|---|---|---|---|
2023/24 |
£60,000 |
£40,000 |
£20,000 |
£20,000 |
2024/25 |
£60,000 |
£50,000 |
£10,000 |
£30,000 |
2025/26 |
£60,000 |
£80,000 |
-£20,000 |
£10,000 |
John’s annual allowance for 2026/27 is £60,000 and it appears that he only has £10,000 available to carry forward, meaning the maximum contribution he can pay in 2026/27 without incurring an annual allowance charge is £70,000.
However, his adviser checks back further than the last three years to see if there was any unused allowance that could be carried forward into 2025/26 to offset the higher contribution:
Tax year |
Annual allowance (AA) |
Total pension input amount |
AA available to carry forward |
Cumulative total |
|---|---|---|---|---|
2022/23 |
£40,000 |
£25,000 |
£15,000 |
£15,000 |
£15,000 from 2022/23 can be carried forward to cover some of the additional contribution paid in 2025/26, and the balance of £5,000 can be covered by carrying forward from 2023/24.
This leaves unused allowance of £15,000 from 2023/24 and £10,000 from 2024/25 that can be carried forward into 2026/27 – this means John can pay the full £80,000 as planned without incurring an annual allowance charge. The maximum contribution using carry forward in 2026/27 will be £85,000 (£60,000 annual allowance + £15,000 from 2023/24 and £10,000 from 2025/26).
Grace made a large contribution to her personal pension plan in tax year 2022/23, carrying forward some unused annual allowance from the 2021/22 tax year. She wants to know how much unused annual allowance she can carry forward because she’s planning on making another large contribution in the 2026/27 tax year. The tapered annual allowance (TAA) doesn’t apply to her.
The table below shows her pension input amounts for the last three tax years and assumes there is no carry forward available from any earlier tax years:
Tax year |
Annual allowance (AA) |
Total pension input amount |
AA available to carry forward |
Cumulative total |
|---|---|---|---|---|
2022/23 |
£40,000 |
£40,000 |
£0.00 |
£0.00 |
2023/24 |
£60,000 |
£20,000 |
£40,000 |
£40,000 |
2024/25 |
£60,000 |
£25,000 |
£35,000 |
£75,000 |
2025/26 |
£60,000 |
£75,000 |
-£15,000 (from 2023/24) |
£60,000 |
Grace paid £75,000 in 2025/26 – as you can see from the figures above, she had more than enough unused AA from the previous two years to cover the excess above £60,000 in 2025/26. She’ll be able to carry forward the remaining £60,000 of unused AA into 2026/27 as well. If she doesn’t mop up the £25,000 left from 2023/24 in 2026/27, she’ll lose it. In 2028/29, the unused allowance available will be the £35,000 from 2024/25 plus any unused amount from 2026/27.
Remember, in order to receive tax relief, she needs to have enough relevant UK earnings to cover the total personal contribution in each tax year as well – you can read more about tax relievable contributions in this technical guide.
Derek is a high earner and will be affected by the TAA for the first time in 2026/27 – he thinks his TAA will be £18,000, as his projected adjusted income is £344,000. (You can find out more about the TAA in our guide.) His pension input amounts for the last three years are:
- 2023/24 - £60,000
- 2024/25 - £40,000
- 2025/26 - £40,000
He wants to know the maximum amount that can be saved in pensions in 2026/27:
Tax year |
Annual allowance (AA) |
Total pension input amount |
(AA available to carry forward) |
Cumulative total |
|---|---|---|---|---|
2023/24 |
£60,000 |
£60,000 |
£0.00 |
£0.00 |
2024/25 |
£60,000 |
£40,000 |
£20,000 |
£20,000 |
2025/26 |
£60,000 |
£40,000 |
£20,000 |
£40,000 |
The maximum amount that Derek can pay to mop up all the available annual allowance in 2026/27 is £18,000 (TAA) + £40,000 (AA carried forward) = £58,000. His threshold income will still be above £200,000 even after paying a £58,000 contribution, so the TAA still applies.
Julia runs her own company and will earn £275,000 in 2026/27 – she has no other income. She’s had a pension since 2015 and has paid in some single contributions over the last few years. She wants to pay a large pension contribution in 2026/27. She hasn’t triggered the MPAA, but she may be impacted by the TAA in 2026/27 given her earnings. She wants to know the maximum amount she can contribute in 2026/27 and whether that will impact her TAA.
Contributions in the last three years were:
- 2023/24 - £25,000
- 2024/25 - £26,000
- 2025/26 - £27,000
Tax year |
Annual allowance (AA) |
Total pension input amount |
(AA available to carry forward) |
Cumulative total |
|---|---|---|---|---|
2023/24 |
£60,000 |
£25,000 |
£35,000 |
£35,000 |
2024/25 |
£60,000 |
£26,000 |
£34,000 |
£69,000 |
2025/26 |
£60,000 |
£27,000 |
£33,000 |
£102,000 |
In 2026/27, her TAA will be £52,500, but if she pays a contribution of at least £75,000, she’ll bring her threshold income to £200,000 and will regain the full AA of £60,000 for 2026/27.
Assuming she does this, the maximum contribution she could pay without becoming subject to an AA charge will be £162,000 (£60,000 AA for 2026/27 + £102,000 annual allowance carried forward). She has the earnings available to cover such a large contribution.