How does carry forward pension allowance work?

Carry forward lets you use unused annual allowance from the previous three tax years in addition to your current year's allowance. You must use your current year's allowance first; then unused allowance is drawn from the earliest of the three previous years, moving chronologically. To carry forward from a previous year, you must have been a member of a registered UK pension scheme in that year.

How many years can you carry forward pension allowance?

Three. You can carry forward unused annual allowance from any of the three previous tax years. Unused allowance from a fourth previous year permanently lapses - it cannot be recovered.

Do I need to notify HMRC about carry forward?

No. Carry forward applies automatically as long as your total pension input does not exceed your combined annual allowance (current year plus carried-forward). You do not need to notify HMRC, file any election, or include carry forward on a Self Assessment return unless your contributions actually exceed the combined allowance and an annual allowance charge is due.

What if I had no earnings in a previous year?

You can still carry forward unused allowance from a year in which you had no earnings, provided you were a member of a registered UK pension scheme at some point during that year - the carry-forward rules look at allowance, not earnings. Note, however, that your current year's personal contributions are capped at 100% of your current-year UK earnings, so if you have no current-year earnings you cannot personally contribute (though employer contributions remain possible without that cap).

Carry Forward Pension Allowance: A 2026/27 Guide for High Earners

Q: Can I carry forward if I was affected by the tapered annual allowance?

Yes, but the allowance you carry forward from a tapered year is the tapered figure that applied to you, not the standard £60,000. A person whose tapered allowance was £10,000 in 2024/25, and who contributed £0 that year, has £10,000 of carryable allowance from that year, not £60,000. This is the source of most carry-forward miscalculations for high earners.

Chris O'Connor

17 August 2026

Carry forward is a pension rule that lets you use any unused annual allowance from the previous three tax years and add it to the current year's allowance. For 2026/27, the standard annual allowance is £60,000, so a person who hasn't used any of their three previous years' allowance can potentially contribute up to £240,000 in a single tax year without triggering an annual allowance charge. To carry forward unused allowance from a previous year, you must have been a member of a registered UK pension scheme during that year.

For the senior professionals NOVA works with - partners on bonus crossings, MDs absorbing deferred compensation, business owners contributing in a year of sale - carry forward is often the rule that determines how large this year's pension contribution can sensibly be. The arithmetic is more involved than it first looks, particularly for anyone affected by the tapered annual allowance in any of the three previous years.

What is carry forward pension allowance?

"Unused allowance" has a precise meaning here: for any given year, it's the difference between the annual allowance that applied to you and the total pension input you actually made across all your pensions that year. If you contributed less than your allowance permitted, the shortfall is potentially available to carry forward.

The window is three years, and it rolls. In 2026/27 you can reach back to 2023/24, 2024/25, and 2025/26; allowance from 2022/23 or earlier has now lapsed, regardless of how much of it was unused. So the oldest year's unused allowance is "use it or lose it" in the most literal sense - it drops out of reach at the end of each tax year. This structure is set out in HMRC's Pensions Tax Manual at PTM055100.

How carry forward works: the rules in 2026/27

The mechanic is structured around four principles.

You use the current year's allowance first. When you make a pension contribution, HMRC's rules apply it against your current tax year's allowance before drawing on any carried-forward allowance. The £60,000 standard allowance (or your tapered allowance, if lower) is always exhausted first.

Then unused allowance from the earliest of the three previous years. Any contribution above the current-year allowance draws on carried-forward allowance from the earliest eligible year first, moving chronologically toward the most recent. This ordering matters: unused allowance drops out of the three-year window each tax year, so the oldest allowance is the most directly "use it or lose it".

The annual allowance figures that apply to each year. The figure you can potentially carry forward is the standard annual allowance from each year, unless you were affected by the tapered annual allowance (in which case, see the next section).

Tax year	Standard annual allowance
2026/27	£60,000
2025/26	£60,000
2024/25	£60,000
2023/24	£60,000
2022/23	£40,000

For a 2026/27 calculation, the three eligible previous years (2023/24 through 2025/26) are all at the £60,000 figure. The £40,000 figure is only relevant for historical context, or for planning conversations about why earlier-year unused allowance has now lapsed.

Two eligibility conditions. You must have been a member of a registered UK pension scheme in each year you carry forward from - active, deferred, or pensioner membership all count, but you must have been in the scheme at some point in the relevant year. So carry forward isn't available to people who joined the pension system more recently than three years ago. Separately, personal contributions remain capped at 100% of your relevant UK earnings in the current tax year, even if you have substantial carryable allowance available. Employer contributions are not subject to this earnings cap, and can absorb unused allowance where personal contributions cannot.

How carry forward interacts with the tapered annual allowance

For senior partners, MDs, and senior bankers whose income triggers the tapered annual allowance, carry forward looks materially different than it does for standard earners - and this is where we see the most expensive miscalculations.

The critical point: when you carry forward from a year in which the tapered annual allowance applied to you, you carry forward the tapered allowance from that year, not the standard £60,000. A person whose tapered allowance was £10,000 in 2024/25, and who contributed £0 that year, has £10,000 of carryable allowance from that year; not £60,000.

To illustrate: a senior partner remembers having "lots of unused allowance" in 2024/25 because they barely contributed. But their actual tapered allowance for 2024/25 was £20,000 (their adjusted income that year was £340,000, putting them mid-taper), and they contributed £5,000 - so their carryable allowance from 2024/25 is £15,000, not the £55,000 the standard arithmetic would suggest. We see this regularly in first carry-forward planning conversations, and the gap between assumed and actual carryable allowance can be tens of thousands of pounds.

When carry forward is and isn't worth pursuing

Carry forward is valuable in three specific situations, and easy to over-rely on in two others.

Three situations where it can genuinely matter:

High earners contributing well above the current-year allowance - typically in a year of business sale, a large bonus, or a pre-tax-year-end planning push.
Bonus recipients in the November–March window absorbing a lump sum into a pension. Carry forward provides headroom for a single large contribution rather than spreading it across years.
High-earning parents at the £100k tax trap may need to make a contribution large enough to bring their adjusted net income back below £100,000. The suitability of this approach will depend on the individual’s circumstances.

Two situations where it's often over-relied on:

You have room in your current-year allowance. If your contributions this year are below £60,000 anyway, you're using current-year allowance, carry forward isn't needed.
Your pension is mostly employer-funded. Employer contributions consume annual allowance just as personal ones do, so if your employer is already routing a substantial contribution, the unused allowance available to carry forward may be much smaller than the headline arithmetic suggests.

How to calculate your carry-forward allowance

The five-step calculation, which works for both standard and tapered earners:

Identify your current-year annual allowance - standard £60,000, or your tapered figure if the taper applies in 2026/27.
For each of the previous three tax years (2023/24, 2024/25, 2025/26), identify the annual allowance that applied to you - standard £60,000, or your tapered figure in any year the taper applied.
For each previous year, identify your total pension input across all your pensions. This includes personal contributions, employer contributions, and the pension input amount for any defined-benefit accrual. Your pension scheme administrator can supply this figure on request.
Calculate unused allowance per previous year: allowance minus pension input, floored at zero. Exceeding the allowance in one previous year doesn't reduce your carry-forward from the others.
Sum the unused allowance from all three previous years and add it to your current-year allowance. The result is your maximum possible contribution this tax year, subject to the 100% earnings cap on personal contributions.

You don't need to notify HMRC when using carry forward, as long as your total contributions don't exceed your combined allowance, it's automatic. The GOV.UK guidance on checking unused annual allowances sets out the official position.

How NOVA can help

Using carry forward pension allowances can meaningfully impact our clients’ long-term plans. We assess the merits of this alongside other savings strategies (such as paying down debt or using ISAs). These allowances are “use it or lose it”, so they can be worth exploring for higher earners or after a jump in income.

If you'd like to have a conversation about carry-forward as an optional within your financial plan with a NOVA adviser, we offer a free 20-minute introductory call. There's no obligation and no charge.

How this article was prepared

This article was written by Chris O'Connor, Financial Adviser and Partner at NOVA Wealth. It cites HMRC's Pensions Tax Manual and GOV.UK guidance directly, with primary sources linked inline at the point of claim. The figures and rules stated reflect the position for the 2026/27 UK tax year.

Capital at risk. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. We do not provide tax advice. This article does not constitute personal advice. All figures quoted are for illustration purposes only. If you are unsure of your options you should seek professional financial advice or visit Pensionwise.gov.uk.

Issued on behalf of Nova. Nova is a trading name of Nova Wealth Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN: 778951) and is a limited company registered in England & Wales (10739796).

Sources

HMRC Pensions Tax Manual PTM055100 - Annual allowance: carry forward: general
HMRC Pensions Tax Manual PTM055200 - Annual allowance: carry forward: calculating unused annual allowance
HMRC Pensions Tax Manual PTM057100 - Annual allowance and tapered annual allowance
GOV.UK - Check if you have unused annual allowances on your pension savings

About the author

Chris O'Connor, Financial Adviser. Chris is a Partner at NOVA Wealth, based in London. He works primarily with lawyers and senior professionals in professional services on retirement and pension planning, contribution and allowance planning, investment strategy, and personal tax planning - helping partners with variable income make the most of the allowances available to them across tax years. Connect with Chris on LinkedIn.