Carry forward lets you contribute up to £240,000 to a pension in 2026/27 by adding this year's £60,000 annual allowance to three unused years behind it. Almost nobody can use more than a fraction of it, because tax relief is separately capped at 100% of what you earn, and on a typical workplace scheme that cap bites first at any salary below roughly £177,800.
The mechanic, in the order HMRC applies it
The annual allowance is £60,000 for 2026/27. Anything you do not use rolls forward for three tax years, then expires.
Contributions are set against the current year's allowance first, then against the oldest carried-forward year, working towards the most recent. From 2026/27 the three years available are 2023/24, 2024/25 and 2025/26, and the allowance was £60,000 in every one of them. The £40,000 years, 2022/23 and earlier, have now dropped out of the window entirely, which quietly raised the theoretical maximum from £220,000 to £240,000.
One eligibility condition, and it is not about contributions: you must have been a member of a UK registered pension scheme during each year you carry forward from. A workplace pension, a SIPP, a stakeholder or a personal pension all count, and you need not have paid anything into it. If you had no scheme at all in a year, that year is gone. This is the trap for people who were self-employed without a pension or living abroad.
The cap that actually binds
Tax relief on your own contributions is limited to 100% of your relevant UK earnings in the year you contribute, or £3,600 if you have little or none. This is a separate rule from the annual allowance and carry forward does nothing to it.
Relevant UK earnings means employment income, trading income and patent income. It does not include rental income, investment income, dividends or pension income. Employer contributions are not affected by the earnings cap at all: they count against the annual allowance but not against your earnings.
Put the two rules side by side and the headline collapses. On a scheme paying the auto-enrolment 8% of total earnings, the earnings cap binds before the annual allowance does for anyone earning under about £177,800. Above roughly £200,000 the taper starts cutting the allowance anyway. There is a narrow band of salaries where £240,000 is arithmetically live, and it is not where the people searching for this sit.
Worked example
Alice earns £88,000 in 2026/27. She has been in her employer's scheme since 2019 on the auto-enrolment minimum applied to total earnings, so £7,040 goes in each year: £4,400 from her, £2,640 from the employer. She has just inherited money and wants to make a large one-off contribution.
Her carried-forward headroom:
| Tax year | Annual allowance | Used | Unused |
| 2023/24 | £60,000 | £7,040 | £52,960 |
| 2024/25 | £60,000 | £7,040 | £52,960 |
| 2025/26 | £60,000 | £7,040 | £52,960 |
| 2026/27 (current) | £60,000 | £7,040 | £52,960 |
Total available: £211,840.
Now the earnings cap. Her relevant earnings are £88,000 and she has already made £4,400 of personal contributions, so she can put in a further £83,600 and still get relief on all of it. Her total pension input for the year becomes £90,640, comfortably inside the £211,840 of allowance, so there is no annual allowance charge.
What the £83,600 costs her:
She pays £66,880 from her own money. The provider reclaims £16,720 at basic rate and adds it, making the gross contribution £83,600. Her income above the £50,270 higher rate threshold is £37,730, so that much of the contribution qualifies for a further 20 percentage points. She reclaims £7,546 through self assessment. Net cost: £59,334.
That is £24,266 of relief on £83,600, an effective rate of 29%, not the 40% she would tell you she gets. A contribution this large drags most of itself down into the basic rate band, and the relief falls with it.
The 29% figure is the part worth carrying away, and it is the reason we think carry forward is usually better used across two tax years than one. Splitting the same contribution over two years lets more of it land against higher rate income in each. That costs you a year of growth and only works if the unused allowance is not about to expire, so it is a judgement rather than a rule, and plenty of advisers would take the growth instead.
Where the taper changes the sums
If your adjusted income exceeds £260,000, your annual allowance falls by £1 for every £2 above it, to a floor of £10,000 (2026/27). The taper only applies if threshold income also exceeds £200,000.
The part people miss is that a tapered year carries forward at its tapered figure. If your allowance was £30,000 in a previous year and you used £10,000, the unused amount you carry is £20,000, not £50,000.
Finding your figures
You need total contributions, employer and employee, for each of the last three tax years. Annual statements from each provider are the reliable source. Payslips work if your salary did not change mid-year. Your personal tax account on GOV.UK holds some of it but often misses employer contributions, which is exactly the half that matters for the annual allowance.
Getting this wrong in the other direction produces an annual allowance charge at your marginal rate, so if you are contributing anywhere near your headroom it is worth having an adviser or accountant check the numbers before the money moves.
For how relief works before you get to carry forward, see pension tax relief explained. For smaller regular increases, see how to top up your pension. To model the effect on a retirement pot, use the UK pension calculator.
Rates: GOV.UK, pension schemes rates and annual allowance. This page sets out the rules and is not personal advice; contributions of this size have consequences that depend on your full circumstances.
Last reviewed: August 2026.
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