Tapered Annual Allowance Calculator UK
Calculate your personal pension annual allowance under the £200,000 Threshold Income and £260,000 Adjusted Income statutory tests. Model taper reductions down to the £10,000 minimum and calculate potential tax charges.
Income & Pension Input Details
Section 228ZA FA 2004 dual income tests: Threshold (£200k) & Adjusted (£260k).
Includes DB deemed accrual growth.
Deducted before PAYE tax calculation.
Deducted when calculating Threshold Income.
HMRC anti-avoidance rule adds this back.
Unused AA from 2023/24, 2024/25, 2025/26.
Dual Statutory Income Tests (Section 228ZA FA 2004)
Threshold income exceeds £200,000. Proceed to Test 2 (Adjusted Income).
Exceeds £260k by £205,000.00. Taper reduces allowance by £1 per £2 of excess.
How the UK Pension Taper Works in 2026/27
The standard UK pension Annual Allowance is £60,000 per tax year. However, under Section 228ZA of the Finance Act 2004, high-earning individuals are subject to a statutory taper that reduces their allowable tax-relieved pension contributions down to a minimum of £10,000.
Crucially, the taper only applies if you fail both statutory income tests:
- Test 1: Threshold Income must exceed £200,000. If your Threshold Income is £200,000 or below, you automatically retain the full £60,000 Annual Allowance, regardless of employer pension funding.
- Test 2: Adjusted Income must exceed £260,000. If Threshold Income exceeds £200,000, you assess Adjusted Income (which adds all employer pension contributions). For every £2 your Adjusted Income exceeds £260,000, your annual allowance drops by £1.
Statutory Tapered Allowance Schedule
| Adjusted Income Level | Allowance Reduction | Remaining Annual Allowance |
|---|---|---|
| Up to £260,000 | £0 | £60,000 (Full) |
| £280,000 | £10,000 | £50,000 |
| £300,000 | £20,000 | £40,000 |
| £320,000 | £30,000 | £30,000 |
| £340,000 | £40,000 | £20,000 |
| £360,000 and above | £50,000 (Maximum) | £10,000 (Statutory Floor) |
Using Unused Carry Forward (Section 228A FA 2004)
High earners who face a reduced tapered allowance can legally protect large pension contributions by tapping into Carry Forward. Under Section 228A FA 2004, you can utilise unused annual allowances from the previous three tax years, provided you were a member of a registered pension scheme in each qualifying year.
Carry forward is always used on a 'use it or lose it' FIFO (first-in, first-out) basis. You must fully exhaust your current tax year's tapered annual allowance before drawing from the earliest available prior year (three years ago). This allows individuals with significant bonuses or company profits to shelter substantial lump sum contributions without triggering the 45% annual allowance charge.
Frequently Asked Questions About Tapered Annual Allowance
Frequently Asked Questions
Clear answers based on official HMRC rules and statutory guidance.
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Allowance and tax relief are separate tests
Annual allowance measures pension input and can include employer contributions and defined-benefit growth. Personal tax relief has a separate relevant-earnings limit.
Check carry-forward membership, tapered allowance and any Money Purchase Annual Allowance before relying on a result. A pension input statement may be needed; a salary-only estimate cannot reconstruct defined-benefit growth.
Check the rules for your circumstances
Official guidance supports the rules described here; it does not approve or certify this calculator. Confirm dates, eligibility and unsupported cases before making a financial decision.