Pension Carry Forward Explained
The annual allowance caps what can go into your pensions each tax year at £60,000. Carry forward is the rule that lets you reach back and use whatever you did not use in the three previous tax years as well. Used properly, someone with no contributions since 2023 could shelter up to £240,000 in 2026/27. It is how bonuses, business sales and windfalls end up in pensions.
How the maths works
The annual allowance has been £60,000 since 2023/24, so in 2026/27 the maximum available is this year's £60,000 plus anything unused from 2023/24, 2024/25 and 2025/26 (source: HMRC rules via MoneyHelper, July 2026).
| Tax year | Allowance | Example: you contributed | Unused |
|---|---|---|---|
| 2023/24 | £60,000 | £20,000 | £40,000 |
| 2024/25 | £60,000 | £30,000 | £30,000 |
| 2025/26 | £60,000 | £40,000 | £20,000 |
| 2026/27 (this year) | £60,000 | £0 so far | £60,000 |
In this example the person could put in up to £150,000 this year: their £60,000 current allowance plus £90,000 carried forward. Contributions count against the current year first, then against the oldest carried-forward year, working forwards. Unused allowance from a year drops off after three years, oldest first, so it pays to use the oldest while it is still alive.
The three conditions
- You were a pension scheme member in those years. Any UK-registered scheme counts, even one you paid nothing into, even an old dormant workplace pot. What does not work is having had no pension at all in the year you want to carry forward from.
- The earnings cap still applies to personal contributions. Tax relief on your own contributions is limited to 100% of this year's UK earnings. To use a big carry forward amount personally, you need earnings to match this year. Employer contributions are not capped by your earnings, which is why company owners often use carry forward through their business.
- The MPAA blocks it for pot contributions. If you have flexibly accessed a pension and triggered the £10,000 Money Purchase Annual Allowance, you cannot use carry forward for defined contribution saving at all.
No paperwork needed (usually)
There is no form to claim carry forward and nothing to tell HMRC in advance. You simply contribute, keep your own record of the calculation, and report through Self Assessment only if you exceed the allowance. Your pension providers can give you contribution histories for the calculation.
When carry forward earns its keep
- A big bonus or redundancy payment. Sheltering it in a pension can rescue tax relief at your highest rate, and salary-sacrificed bonuses save National Insurance too.
- Selling a business or property. Proceeds cannot go in directly beyond your earnings, but a strong earnings year plus carry forward can move a lot.
- Company owners. Employer contributions from your limited company can use carry forward without the personal earnings cap, subject to the usual "wholly and exclusively" test for the business.
- Catching up after lean years. Career breaks and self-employment dips leave unused allowance behind; carry forward gives you three years to recover it.
See what a lump sum could become
Add a one-off boost to your pot in our free calculator and watch what compounding does with it by retirement.
Try the calculator →Worth double-checking
Two groups need care: very high earners, whose allowance may have been tapered below £60,000 in earlier years (you carry forward the unused part of the reduced figure, not the full one), and anyone in a defined benefit scheme, where the "contribution" figure is a calculated value your scheme must confirm. For sums this size, an hour of regulated advice is cheap insurance.
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This article is for general information only and does not constitute financial advice. Carry forward calculations depend on your personal contribution history and any taper in earlier years; figures relate to the 2026/27 tax year and are correct as of July 2026. For advice tailored to you, speak to a financial adviser regulated by the Financial Conduct Authority (FCA), or get free guidance from MoneyHelper.