Written by PensionTaxReliefCalculator Editorial. Reviewed against official UK guidance. Methodology
Carry forward lets you use unused annual allowance from the previous three tax years to make larger pension contributions. Most valuable in bonus years, business sale years and for self-employed income spikes.
Carry forward allows you to use unused pension annual allowance from the three previous tax years when your contributions in the current year exceed the standard £60,000. To use carry forward: first, use the current year's full £60,000 allowance; then apply unused allowance from the earliest of the three prior years (2023/24), then 2024/25, then 2025/26. The unused allowance from each year is that year's annual allowance minus the total pension inputs in that year.
There are two essential conditions. First, you must have been a member of a registered UK pension scheme in each year whose allowance you wish to use, not necessarily making contributions, just enrolled. A basic workplace pension auto-enrolment counts. Second, your total contributions in the carry-forward year are still limited to 100% of your relevant UK earnings in that year. So if you earn £80,000, you cannot contribute more than £80,000 even if you have £180,000 of carry-forward available, unless the excess comes from employer contributions (which are not earnings-capped).
The annual allowance was £40,000 for 2022/23 and earlier years, then £60,000 from 2023/24 onwards. For carry forward in 2026/27, the three relevant prior years are 2023/24 (£60,000), 2024/25 (£60,000) and 2025/26 (£60,000). Available carry forward from each year = allowance for that year minus total pension inputs in that year (minimum zero).
Worked example: in 2023/24 you contributed £8,000 total (you and your employer); in 2024/25 £10,000; in 2025/26 £12,000. Available carry forward = (£60,000 − £8,000) + (£60,000 − £10,000) + (£60,000 − £12,000) = £52,000 + £50,000 + £48,000 = £150,000. Adding the current year's £60,000, you can contribute up to £210,000 in 2026/27, subject to earning at least £60,000 in 2026/27 for the personal element, with employer contributions making up any difference.
The highest-value applications are where a large income event occurs in a single year. An employee receiving a £100,000 bonus, a business owner taking significant dividends or salary in a profitable year, or a professional selling a business, all might have accumulated three years of minimal pension inputs combined with substantial carry-forward allowance. The tax saving from contributing a large sum in that year (at 40% or 45% income tax) is very substantial.
For self-employed or company-director individuals, carry forward enables front-loading pension contributions in good income years without breaching the annual allowance. A sole director who has had three quiet years with minimal company pension contributions might have £150,000+ of carry-forward available, all of which can be deployed in a single profitable year as employer pension contributions, reducing corporation tax and personal income simultaneously.
Carry forward does not help if your earnings in the current year are low. If you have zero or minimal relevant UK earnings, the 100% earnings cap prevents personal contributions above that level, carry-forward allowance cannot override this. An individual on career break earning nothing cannot make a personal pension contribution above £3,600 (the minimum HMRC permits without earnings) even with substantial carry-forward available.
Carry forward is also unavailable for the money purchase annual allowance (MPAA). If you have triggered the MPAA by flexibly accessing a pension, your DC contribution limit is fixed at £10,000 per year with no carry-forward ability. If there is any possibility you will want to make large DC contributions in future, think carefully before taking flexible income from a pension pot.
Three years. You can carry forward unused allowance from the three previous tax years only. Earlier years are lost permanently.
No, but you must have been a member of a registered pension scheme in each year whose unused allowance you wish to use. Auto-enrolment membership counts even with zero contributions.
No. If you have triggered the money purchase annual allowance, carry forward cannot increase your DC contribution limit above £10,000.