Last updated: March 2026.
What is pension carry forward?
The UK pension annual allowance is the maximum you can pay into pensions in a single tax year while still receiving tax relief. For most people this is £60,000 (2025/26). Anything above that, including employer contributions, triggers a tax charge.
Carry forward is the mechanism that lets you use unused allowance from the previous three tax years on top of this year's. So if you've contributed less than the full £60,000 in recent years, the unused balance is sitting there available to use.
How much can I carry forward?
| Year | Standard annual allowance | Notes |
|---|---|---|
| 2025/26 | £60,000 | Current year |
| 2024/25 | £60,000 | Available for carry forward this year |
| 2023/24 | £60,000 | Available for carry forward this year |
| 2022/23 | £40,000 | Available for carry forward this year (last year at the old £40k level) |
A person who's been a member of a registered pension scheme for the last 3 years, and contributed nothing in 2022/23, 2023/24 or 2024/25, could theoretically contribute up to £60,000 + £60,000 + £60,000 + £40,000 = £220,000 this tax year (subject to having earnings of at least that much).
Who is carry forward most useful for?
Three groups benefit most:
- Business owners and self-employed people with variable income. A bumper year can be used to top up pensions for years when contributions were lower.
- Employees receiving large bonuses. Routing a £100,000 bonus into pension, using carry forward, can deliver 40–45% tax relief, effectively £40,000–£45,000 saved.
- Anyone selling a business or asset. Realising a large capital sum is a natural moment to maximise pension contributions, particularly to reduce CGT exposure via pension contribution-based income tax relief structures.
The basic rules
To use carry forward, you must:
- Have been a member of a registered UK pension scheme in each of the years you want to carry forward from (it doesn't matter whether you contributed)
- Have used your full current-year allowance first, before using carry forward
- Use the oldest available year's unused allowance first, i.e. 2022/23 must be used up before 2023/24, and so on
- Have earnings (or relevant UK earnings) at least equal to the total contribution you want to make
The tapered annual allowance for high earners
If your adjusted income exceeds £260,000 in a tax year, your annual allowance is reduced (tapered) by £1 for every £2 of income over the threshold, down to a minimum of £10,000 for those with adjusted income of £360,000 or more.
The taper applies to each year separately, so when working out how much you can carry forward, you need to use the tapered allowance for each year if applicable. A high earner might find their effective carry-forward pool is much smaller than the headline £60,000 × 3.
Worked example: a typical SME owner
Sarah, an SME owner aged 50, made these pension contributions over the last three years:
| Tax year | Annual allowance | Sarah's contribution | Unused (available to carry forward) |
|---|---|---|---|
| 2022/23 | £40,000 | £10,000 | £30,000 |
| 2023/24 | £60,000 | £15,000 | £45,000 |
| 2024/25 | £60,000 | £20,000 | £40,000 |
| 2025/26 (current) | £60,000 | - | £60,000 |
Sarah's business has had a strong year and she wants to make a large pension contribution before 5 April 2026. Her maximum is:
£60,000 (current year) + £40,000 + £45,000 + £30,000 = £175,000
Provided she has £175,000 of relevant UK earnings (which includes salary and her trading profits if self-employed), she can make this contribution. As a higher-rate taxpayer, she receives 40% income tax relief, meaning a £175,000 pension contribution effectively costs her £105,000 net.
The salary sacrifice cap from April 2029
From April 2029, the National Insurance saving on salary-sacrificed pension contributions will be capped at £2,000 per year. Carry forward isn't affected, it relates to the income tax annual allowance, not NI. But the planning angle is worth noting: salary-sacrificed pension contributions above £2,000 will become more expensive from 2029 onwards. See our salary sacrifice cap explainer.
What carry forward doesn't do
- It doesn't extend the £268,275 tax-free lump sum cap, that's a separate lifetime limit
- It doesn't bypass the Money Purchase Annual Allowance (MPAA). If you've triggered the MPAA (by taking taxable income from a DC pension), your annual allowance is reduced to £10,000 and carry forward cannot be used to increase it.
- It doesn't apply if your only pension is a final salary scheme, different rules around 'pension input amount' apply.
- It doesn't help with the £3,600 minimum allowance for non-earners (e.g. children's pensions)
Frequently asked questions
Do I need to do anything special to use carry forward?
No formal claim is needed. You simply make a pension contribution larger than the current year's annual allowance, HMRC checks your previous years' contributions and applies carry forward automatically. Keep records of your contributions in each tax year.
Can I use carry forward to exceed my earnings?
No. Your contribution in any tax year cannot exceed 100% of your relevant UK earnings (or £3,600 gross if you have no earnings). Carry forward unlocks more allowance but does not increase your earnings cap.
Does carry forward apply to ISAs?
No. The ISA allowance has no carry forward, unused allowance is lost permanently on 6 April. The 3-year carry forward applies only to the pension annual allowance.
What happens if I exceed the available allowance?
Excess contributions trigger an Annual Allowance Charge, which adds the excess to your taxable income for the year. This typically wipes out the value of any tax relief you received. Avoidable with careful planning.
Can my employer's contributions use carry forward?
Yes. Both personal and employer contributions count toward the annual allowance and both benefit from carry forward.