The pension annual allowance is the most you can save across all your pensions in a tax year before tax is due: £60,000 in 2026/27, lower for some.

That is the headline answer to how much you can pay into a pension each year, but it is one of two limits. A second, separate one decides how much of what you pay in earns tax relief. This page covers both, what counts, carrying forward unused allowance, and when the allowance is lower.

If you are weighing up drawing on a pension as well, Pension Wise from MoneyHelper calls itself free, impartial and government-backed, and its appointments explain the different ways of taking money from a defined contribution pension. Your own headroom, across every scheme you pay into, is a question for an FCA-authorised adviser to answer, and the form on this page carries it to one, free. This is general information, not personal tax advice.

What is the pension annual allowance?

GOV.UK defines it this way: "Your annual allowance is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay tax." The figure on the same page, read on 18 October 2026, is "£60,000 this tax year", so £60,000 for 2026/27 (GOV.UK, Annual allowance).

  • It limits the tax-efficient total, not what you may pay. HMRC's published rates say "There’s no limit on the amount that an individual can contribute to a registered pension scheme" (HMRC, pension schemes rates). Saving above the allowance is not refused; it can bring a charge, which the annual allowance tax charge guide explains.
  • It covers all your pensions together. GOV.UK says "Your annual allowance applies to all of your private pensions, if you have more than one", so a workplace pension and a SIPP share one £60,000.

It can be lower after you start taking money flexibly from a pension, or on a high income; both are covered further down.

How the figure has changed

HMRC's pension schemes rates page, updated for 2026 to 2027, gives the standard allowance year by year:

Tax yearStandard annual allowance
2023 to 2024 up to and including 2026 to 2027£60,000
2016 to 2017 up to and including 2022 to 2023£40,000

Earlier years, back to 2011 to 2012 and including the 2015 to 2016 year that was split in two when pension saving periods were lined up with tax years, are on HMRC's rates page (accessed 18 October 2026).

What counts towards the allowance?

It depends on the type of pension.

Defined contribution (money purchase) pensions. GOV.UK counts every payment into the pot in the tax year, whoever makes it, with your employer given as the example, and its flexible-access guidance makes clear the tax relief added is included. So the measure is the gross amount reaching the pot: your own payments, the relief on them, and your employer's payments, across every scheme you belong to. How relief is added is in the guide to the three ways relief is given, and whether salary sacrifice changes the picture is in its own guide.

Employer contributions therefore use up the same £60,000 as your own. They are not tied to your earnings in the way your own relief is: HMRC's Pensions Tax Manual says "Contributions paid by a member's employer do not qualify for tax relief for the member", and that "Unlike for scheme members there is no set limit on the amount of tax relief that an employer may receive in respect of its contributions", though the employer's relief "will be considered under the normal tax rules as a business expense" (PTM041000). Whether they are taxed as a benefit, and how a company deducts them, are in the employer contributions tax guide, limited company contributions and whether company contributions are deductible.

Defined benefit (final salary and similar) pensions. Here the measure is not what you or the employer pay in. HMRC's manual takes "the increase in the value of the individual’s promised benefits over the pension input period"; if the value fell, the saving counts as nil. The valuation steps are in the guide to defined benefit pension input amounts.

How much can you pay in and still get tax relief?

This is the second limit, and it applies to your own payments. HMRC's rates page for 2026 to 2027 limits tax relief to contributions up to the higher of 100% of your UK taxable earnings and £3,600. The manual calls the £3,600 the "basic amount" and counts the relief added by your provider as part of your contribution, so it is a gross figure. Where earnings are below £3,600, relief on the part above them "can only be given if the contribution is paid to a pension scheme that operates the relief at source (RAS) system".

So the two limits do different jobs: the relief limit follows your earnings, while the annual allowance is a fixed figure before any reduction. Paying in more than your earnings is allowed, but relief stops at the limit. What counts as earnings, and how relief is given and claimed, are in pension tax relief; low and no earnings in the no-income guide; the self-employed in their own guide; and age limits in relief after 75.

Can you pay in more by carrying forward unused allowance?

Yes, within conditions. HMRC's manual says that from 2019-20 unused allowance from the previous three tax years can be carried forward, on top of the current year's own allowance. The conditions, and the order in which the years are used, are in the carry forward guide.

The figures you need are your pension savings in each scheme for each of those years, which GOV.UK says your providers can give you if they have not already. Matching several years' statements against the right allowances takes care; if you would rather have help lining them up, an FCA-authorised adviser could go over those statements alongside you if you say so when you use the form on this page.

Whether a spouse's unused allowance can be used is answered in the guide on transferring allowance to a spouse.

When is the allowance lower than £60,000?

Two situations cut it. Each has its own guide, so this is the outline only.

High incomes: the tapered allowance

HMRC's rates table gives a threshold income limit of £200,000 and an adjusted income limit of £260,000 for 2026 to 2027; the allowance is reduced only when both are passed. GOV.UK's taper guidance says it then falls by £1 for each £2 of adjusted income over £260,000, and the rates table puts the floor for 2026 to 2027 at £10,000. Both incomes are defined terms with their own calculations, set out in the taper guide; employer contributions and adjusted net income is a separate question.

After taking money flexibly: the money purchase annual allowance

Once you have flexibly accessed a defined contribution pension, for instance by drawing cash, or a short-term annuity, out of a flexi-access drawdown fund, or by taking an uncrystallised funds pension lump sum, GOV.UK says a lower limit applies to further defined contribution saving: the money purchase annual allowance (MPAA). HMRC's rates table puts it at £10,000 for 2026 to 2027. Other saving keeps a separate limit: GOV.UK says "The alternative annual allowance is £50,000", covering defined benefit saving and defined contribution saving made before the flexible access, though it may differ for someone with adjusted income above £260,000.

A lifetime annuity is not automatically outside the rule. HMRC's manual (PTM056520) treats one as a trigger where the right to it dates from 6 April 2015 or later and its terms let the income go down other than in prescribed cases, with the trigger timed just before the first payment; the provider can confirm how a contract is written. The full trigger list is in the MPAA guide, and the choice it can affect in annuity or drawdown.

Questions about how much you can pay in

Is the limit different for a SIPP or a particular provider's pension?

No. The allowance and the relief limit are tax rules, so a SIPP, a stakeholder pension or a workplace scheme all sit under the same two limits, and GOV.UK applies the allowance to all your private pensions together. See the SIPP guide.

What is a pension input period?

It is the period whose saving is tested against a tax year's allowance. HMRC's manual says that, since the 2015 alignment, "The subsequent pension input periods for that arrangement are the tax years beginning after the 5 April on which the first pension input period ended", so in practice it is the tax year, 6 April to 5 April.

Is the annual allowance the same as the tax-free pension allowance?

No. Searches for a "tax-free allowance" can mean either. The annual allowance limits saving in; the lump sum allowance limits the tax-free cash taken out. GOV.UK's pension schemes rates page lists the standard lump sum allowance as £268,275 for 2026 to 2027. The lump sum guides are the tax-free lump sum guide and the lump sum and death benefit allowance.

Should I keep paying into my pension?

That depends on your finances, age, other savings and goals, so it cannot be answered in general. Pension investments can go down as well as up, so a pot might end up worth less than the amount paid in. If you are weighing it up, Pension Wise and an FCA-authorised adviser are both routes to a conversation about your position.

Next step

The allowance and the relief limit are only numbers until they meet your own earnings, employer payments and earlier years. To see where your own numbers land, jot down your situation in the form on this page; an adviser authorised by the FCA will be in touch, at no cost to you. Before sharing details with any firm, the FCA publishes a guide to pension scams. For the wider picture, start from pension tax relief or pension tax.

Sources

Pages read on 18 October 2026 unless stated.