Pension Carry Forward Explained: 2026/27 Rules and Worked Examples
Published 11 June 2026 · 7 min read
The short answer: if you didn't use your full pension annual allowance in the last three tax years, you can “carry forward” the unused amounts into 2026/27 — potentially contributing up to £240,000 in a single year without a tax charge (capped at 100% of this year's earnings for personal contributions). Work out your exact figure with our free carry forward calculator →
What is carry forward?
The annual allowance — £60,000 for 2026/27 — caps how much can go into your pensions each tax year with tax relief. Carry forward is the rule that stops unused allowance going to waste: any headroom from the three previous tax years can be added to this year's allowance.
It exists precisely for lumpy income: a big bonus, a business sale, an inheritance you want to shelter, partnership profits, or simply years where you contributed little while money was tight. Instead of being limited to £60,000, you can catch up in one go.
Which years can I use in 2026/27?
| Tax year | Standard allowance | Status |
|---|---|---|
| 2026/27 (current) | £60,000 | Must be used in full first |
| 2025/26 | £60,000 | Carry forward available |
| 2024/25 | £60,000 | Carry forward available |
| 2023/24 | £60,000 | Oldest usable year — use it or lose it |
Allowances may be lower for any year in which you were subject to the tapered annual allowance as a high earner.
The rules in plain English
1. You must have had a pension in those years
You need to have been a member of a registered pension scheme in each year you carry forward from — but you didn't need to contribute anything. Being enrolled in any workplace pension counts, even a dormant one from an old job.
2. This year's allowance goes first, then oldest year first
Contributions use up the current year's £60,000 before touching carried-forward allowance. After that, unused allowance is consumed starting with the oldest year (2023/24), which would otherwise expire first.
3. Personal contributions are capped at 100% of this year's earnings
Tax relief on your own contributions is limited to your earnings in the year you contribute. Earn £80,000 in 2026/27 and your personal contributions max out at £80,000 — however much old allowance you hold. Employer contributions are not capped by your earnings, which is why company directors often use carry forward via employer contributions.
4. No claim form needed — but keep records
There is nothing to file to use carry forward; you simply make the contribution. But keep your own calculation and pension statements for each year, in case HMRC asks. A charge only needs reporting on self assessment if you exceed your total available allowance.
5. Accessed your pension flexibly? Carry forward is off the table
Once you've flexibly accessed a defined contribution pension, the Money Purchase Annual Allowance (£10,000) applies to DC contributions and carry forward can no longer be used for them.
Worked example
James — selling his business in 2026/27
James earns £120,000 and wants to shelter sale proceeds in his SIPP. His recent pension contributions (personal + employer combined) were:
2023/24: £20,000 contributed → £40,000 unused
2024/25: £25,000 contributed → £35,000 unused
2025/26: £30,000 contributed → £30,000 unused
Carry forward available: 40,000 + 35,000 + 30,000 = £105,000
Plus the full 2026/27 allowance: £60,000
Total headroom: £165,000
But James's personal contributions are capped at his £120,000 earnings this year. To use the rest, he could contribute again next year — or, if he operates through a company, make employer contributions, which aren't earnings-capped.
Why higher earners should check every year
Carry forward pairs naturally with the tapered annual allowance: if a bonus year pushes your contributions over a tapered allowance, carried-forward allowance from earlier years can absorb the excess and cancel the tax charge. The catch is that any year in which you were tapered also has a smaller amount available to carry forward — so the calculation needs doing year by year, not with a flat £60,000.
Run your own numbers
Free, no sign-up, and handles the taper interaction automatically:
This article is for general information only and is not financial or tax advice. Pension and tax rules can change, and their effect depends on your circumstances. Figures relate to the 2026/27 UK tax year. Consider taking regulated financial advice before making large pension contributions.