Pension contributions in 2026/27: the allowance, the taper and carry forward
Pensions remain the most generous tax relief most people have. How much you can pay in, how higher-rate relief is claimed, and what happens to very high earners.
You get tax relief on pension contributions up to 100% of your earnings, within an annual allowance of £60,000 that covers your own contributions, your employer’s and any tax relief added. Unused allowance from the previous three tax years can usually be carried forward, if you were a member of a pension scheme in those years.
How relief reaches you
In a relief at source scheme, your provider adds basic rate relief of 20%: £800 from you becomes £1,000 in the pension. Higher and additional rate taxpayers claim the rest on their tax return. HMRC’s example: someone earning £60,270 who pays £12,000 into a pension can claim an extra 20% relief on £10,000, the amount of their income taxed at 40%.
The taper for high earners
If your threshold income is over £200,000 and your adjusted income, which includes employer contributions, is over £260,000, your annual allowance falls by £1 for every £2 above £260,000, to a minimum of £10,000.
The allowance reaches its £10,000 floor at £360,000 of adjusted income.
Show the data
| £240k | £60,000 |
|---|---|
| £260k | £60,000 |
| £280k | £50,000 |
| £300k | £40,000 |
| £320k | £30,000 |
| £340k | £20,000 |
| £360k | £10,000 |
| £380k | £10,000 |
For company owners
Employer contributions from your company are usually deductible for corporation tax and free of National Insurance, which makes them one of the most efficient ways to take value out of a business.
From 6 April 2027, unused pension funds will usually count towards your estate for inheritance tax. That changes how pensions fit into later-life and estate planning.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.