Calculate your 2026/27 annual allowance
Enter your threshold income (broadly: total taxable income minus your own pension contributions paid via relief at source) and your adjusted income (broadly: total taxable income plus all employer pension contributions). The calculator applies the 2026/27 taper rules.
How the 2026/27 taper works
The standard pension annual allowance is £60,000. It only tapers when both tests are failed: threshold income above £200,000 and adjusted income above £260,000. Fail both and the allowance drops by £1 for every £2 of adjusted income over £260,000, down to a floor of £10,000, which is reached once adjusted income hits £360,000. The two-test design is the safety valve: whatever your employer contributions do to adjusted income, you keep the full £60,000 as long as threshold income stays at or below £200,000. Full definitions of the two income measures – the place most people go wrong – are in our tapered annual allowance guide.
Worked examples
| Adjusted income | Excess over £260,000 | Reduction (÷2) | Annual allowance |
|---|---|---|---|
| £270,000 | £10,000 | £5,000 | £55,000 |
| £300,000 | £40,000 | £20,000 | £40,000 |
| £360,000 | £100,000 | £50,000 | £10,000 (floor) |
All three examples assume threshold income is also above £200,000 – if it is not, the allowance stays at £60,000 in every case. Note the tidy symmetry of the design: every £10,000 of adjusted income above £260,000 costs exactly £5,000 of allowance, until the floor stops the slide at £360,000. Beyond that point, additional income does no further damage to the allowance.
Three traps the calculator can't see
- Bonuses and vesting shares can drag you in retrospectively. The test uses the tax year's final figures, so a year-end bonus can taper an allowance you thought was safe – and trigger an annual allowance charge on contributions already made.
- Carry forward still works. Unused allowance from the three previous tax years can be carried forward on top of this year's (tapered) allowance – often the difference between a charge and no charge in a spiky-income year.
- The taper is not the MPAA. If you have flexibly accessed a pension, the £10,000 Money Purchase Annual Allowance applies instead, with no carry forward – a different regime entirely.
How the thresholds got here
The taper's numbers have moved twice since it arrived in April 2016, which matters when you calculate carry forward from earlier years – each past year's unused allowance is measured against the rules of that year, not today's:
| Tax years | Threshold income test | Adjusted income test | Minimum allowance |
|---|---|---|---|
| 2016/17 – 2019/20 | £110,000 | £150,000 | £10,000 |
| 2020/21 – 2022/23 | £200,000 | £240,000 | £4,000 |
| 2023/24 onwards (incl. 2026/27) | £200,000 | £260,000 | £10,000 |
Note also that the standard annual allowance itself was £40,000 until April 2023, when it rose to £60,000 – another reason old-year carry forward sums need the old-year figures.
Paying a charge: don't forget scheme pays
If you do exceed your tapered allowance, the annual allowance charge does not always have to come out of your bank account. Where the charge for a scheme exceeds £2,000 and your contributions to that scheme exceeded the standard allowance, you can usually require the scheme to pay it from your pot under mandatory "scheme pays" rules, and many schemes offer a voluntary version beyond that. It spreads the pain, but it is still your retirement money – prevention beats settlement.
What high earners can actually do
Common levers include timing contributions across years to stay under the thresholds, using carry forward deliberately, weighing salary or bonus sacrifice (which reduces threshold income but shifts the amount into employer contributions inside adjusted income), and – where the allowance is truly floored at £10,000 – looking at ISAs and other wrappers for the surplus. These interact with each other and with the £60,000 headline in non-obvious ways, which is why our pension planning for high earners guide treats them together. Getting the income definitions wrong is expensive in both directions – over-contributing triggers a charge, under-contributing wastes relief at your highest marginal rate – so for anyone near the thresholds, an FCA-regulated adviser can model your exact numbers before the tax year crystallises them.