Carry forward pension allowance explained
2 Oct 2025
The idea in a nutshell
Carry forward lets you use any unused pension annual allowance from the last three tax years. You add it to this year’s allowance so you can pay in more, if you’re eligible. You must have been a member of a registered pension scheme in each year you carry forward from. You also use the current year’s allowance first, then work back from the earliest of the three years. 
Key numbers for 2025/26
For most people, the annual allowance is £60,000. If you have flexibly accessed a defined contribution pension, the Money Purchase Annual Allowance (MPAA) is £10,000. High earners may have a tapered allowance if “adjusted income” is over £260,000 (threshold income £200,000). The minimum tapered allowance is £10,000. 
Who can use it
You can use carry forward if you were a member of a registered pension scheme in the years you want to use, even if you didn’t pay in then. Personal contributions that get tax relief are limited to your UK earnings for the year (or £3,600 if higher), though employers can also contribute. 
How it works (step-by-step)
Use this year’s allowance first.
Then use any leftover allowance from the earliest of the last three tax years.
Move forward year by year until you’ve used what you need.
In 2025/26, the three look-back years are 2022/23, 2023/24 and 2024/25. Because 2022/23’s allowance was £40,000 and the next two were £60,000, the maximum possible contribution using full carry forward (and this year’s £60,000) can be up to £220,000 gross, if you meet the rules. 
High earners and the taper
If your adjusted income is above £260,000, your allowance reduces by £1 for every £2 over that level, down to a minimum of £10,000. Adjusted income broadly includes your income plus any employer pension contributions. Carry forward still works, but you calculate using your reduced allowances for those years. 
If you’ve taken pension money already (MPAA)
Once the MPAA is triggered, you can’t use carry forward to increase the £10,000 limit for money purchase (defined contribution) contributions. Carry forward may still apply to defined benefit accrual via the “alternative annual allowance,” which is separate. 
Paying in
If you have a workplace pension, your employer usually pays in for you and may match your contributions. You can top up through payroll or as one-off payments. No workplace pension, or already maxing employer match? You could consider opening a private pension, such as the Penny Personal Pension, to keep everything in one place. (Penny helps you find and combine old workplace pensions into one easy app.)
Charges and admin
If carry forward covers everything, there’s no annual allowance tax charge to pay. If it only covers part of it, you’ll pay the balance via Self Assessment. Keep records of your contributions and how you worked it out. 
Good to know
Tax rules can change, and benefits depend on your circumstances. Scottish tax bands differ.
Unsure if you’re affected by the taper or MPAA? Consider speaking to a regulated financial adviser for personalised help.
Penny is authorised and regulated by the Financial Conduct Authority.
