How much can I pay into my pension each year?
For 2026/27, most people have a standard pension annual allowance of £60,000. This is the total pension saving across all schemes before an annual allowance tax charge may apply. Separately, tax relief on your own contributions is usually limited to 100% of your relevant UK earnings; people with low or no earnings can normally pay £2,880 net (£3,600 gross) into a relief-at-source pension.
What “annual allowance” means
Your annual allowance is the total you can save across all your pensions each tax year before a tax charge may apply. It covers:
all payments into defined contribution pensions (from you, your employer, and tax relief), and
the increase in value of defined benefit pensions.
Defined contribution pensions (most workplace and personal pensions)
You can usually get tax relief on your own payments up to 100% of your earnings.
Employer and third-party payments can take the overall pot higher, but everything together still has to fit within your annual allowance.
Example: earn £25,000? You could pay £20,000 net (topped up to £25,000 with tax relief). Your employer could then add up to £35,000, taking the year’s total to £60,000.
Low or no earnings? You can still get tax relief on up to £3,600 gross each year (that’s £2,880 from you, £720 tax relief) until age 75.
Defined benefit pensions (final salary or career average)
What’s tested against the allowance is the growth in your promised pension during the year (your “pension input amount”), not what you personally paid in. Your scheme works this out for you.
When your allowance may be lower
High earners: If your threshold income is over £200,000 and your adjusted income is over £260,000, your allowance tapers down by £1 for every £2 over £260,000 — to a minimum of £10,000.
You’ve taken pension money flexibly: If you’ve started taking taxable money from a defined contribution pension (for example, through drawdown income or UFPLS), the Money Purchase Annual Allowance (MPAA) applies. That sets your DC allowance to £10,000. Taking only the tax-free lump sum usually doesn’t trigger this.
Can I use “carry forward”?
In 2026/27, you may be able to carry forward unused annual allowance from 2023/24, 2024/25 and 2025/26. You must have been a member of a registered pension scheme in each year you use, and you use the current year’s allowance first. You still need enough relevant UK earnings for tax relief on your own contributions. Carry forward cannot increase the £10,000 MPAA.
What if I go over?
Going over the annual allowance does not automatically cancel pension tax relief. Instead, an annual allowance tax charge broadly removes the tax advantage on the excess. You must work out and report the charge. It can be paid personally or, in some cases, through your pension scheme:
Mandatory scheme pays may apply if the tax charge is more than £2,000 and your pension saving in that scheme is more than the standard annual allowance, provided you meet the deadline. A scheme may also offer voluntary scheme pays.
If the scheme does not pay all of the charge, you pay the balance yourself.
You must still report the charge through Self Assessment, even if your pension scheme pays some or all of it.
Knowing your allowance limits
If you exceed the allowance in a scheme, your provider should send you a pension savings statement. If you have more than one pension, ask each provider for a statement.
Quick recap
Standard annual allowance (2026/27): £60,000.
Personal tax relief limit: 100% of your earnings (or £3,600 gross if you have low/no earnings).
Possible reductions: taper for high earners, MPAA £10,000 after flexible access.
Carry forward can boost your allowance (but not the MPAA).
Quick recommendation
This article is for information only and isn’t personal financial advice. If you think you might be close to the limits, consider speaking to a regulated financial adviser.
How Penny can help
Penny helps you find and combine your old workplace pensions into one easy-to-use mobile app — so it’s simpler to see what’s going in each year. Penny is authorised and regulated by the Financial Conduct Authority.
