# Pension carry forward in 2026 to 2027: one client's £135,000 of headroom worked through, and the £40,000 that lapses on 5 April 2027 > Carry forward lets a client use unused pension allowance from three past years. One client worked through, and the allowance that lapses on 5 April 2027. - Page to cite: https://aeolookup.com/financial-advisers/pension-carry-forward-annual-allowance-2026-27-worked/ - Publisher: AEO Lookup (https://aeolookup.com/) - Section: Financial advisers and mortgage brokers, Annual reviews and ongoing service - Published 7 October 2026 - Key fact: A client who paid in £20,000, £35,000 and £50,000 in the three years to 2025 to 2026 has £75,000 of unused allowance plus £60,000 for this year, £135,000 in all. A £130,000 contribution in 2026 to 2027 uses this year's £60,000, then £40,000 from 2023 to 2024, £25,000 from 2024 to 2025 and £5,000 from 2025 to 2026, leaving £5,000 to carry into next year. Without it, the 2023 to 2024 £40,000 lapses on 5 April 2027. - Sources: GOV.UK, Pension schemes rates and allowances (annual allowance £60,000 for 2023 to 2024 through 2026 to 2027; money purchase annual allowance £10,000; updated 6 April 2026); GOV.UK, Tax on your private pension: annual allowance (carry forward from the previous 3 tax years); GOV.UK, Check if you have unused annual allowances on your pension savings (membership condition); HMRC Pensions Tax Manual PTM055100 (current year used first, then earliest year); GOV.UK, Work out your reduced (tapered) annual allowance (£200,000 threshold income, £260,000 adjusted income, £10,000 minimum); GOV.UK, money purchase annual allowance guidance (unused MPAA cannot be carried forward). All read 7 October 2026. Carry forward is one of the few pension rules with a hard yearly deadline that clients rarely see coming. Any allowance a client did not use in 2023 to 2024 can only be carried into the current tax year, 2026 to 2027. After 5 April 2027 it is gone. For an advice firm, that makes carry forward a job for this autumn's annual reviews, not next March. ## The rules in four lines - The allowance. GOV.UK's pension schemes rates give an annual allowance of £60,000 for each year from 2023 to 2024 to 2026 to 2027. It was £40,000 in 2022 to 2023, which no longer matters for carry forward this year. - Three years back. GOV.UK says a client may be able to carry over annual allowance not used in the previous three tax years. - Membership. GOV.UK says you cannot carry forward from any tax year in which the client was not a member of at least one UK registered pension scheme (or a qualifying overseas scheme). - Order. HMRC's Pensions Tax Manual (PTM055100) says the current year's allowance is used first, then unused allowance from the three previous years, earliest year first. ## One client worked through A director's total pension input amounts were: | Tax year | Annual allowance | Paid in | Unused | |---|---|---|---| | 2023 to 2024 | £60,000 | £20,000 | £40,000 | | 2024 to 2025 | £60,000 | £35,000 | £25,000 | | 2025 to 2026 | £60,000 | £50,000 | £10,000 | | Total brought forward | | | £75,000 | Add this year's £60,000 and the client can have £135,000 paid in during 2026 to 2027 without an annual allowance charge, provided none of the taper or money purchase points below applies. The company plans a £130,000 employer contribution. In HMRC's order it uses: 1. this year's £60,000; 2. £40,000 from 2023 to 2024, the whole amount; 3. £25,000 from 2024 to 2025, the whole amount; 4. £5,000 from 2025 to 2026. That leaves £5,000 of the 2025 to 2026 allowance, which can still be carried into 2027 to 2028. If the contribution waits until after 5 April 2027, the £40,000 from 2023 to 2024 lapses, and the most that could go in during 2027 to 2028 without a charge falls by that amount. ## Three points that change the answer **Tapered annual allowance.** GOV.UK says the allowance reduces by £1 for every £2 of adjusted income above £260,000, but only if threshold income is also above £200,000, and it cannot fall below £10,000. A client with adjusted income of £300,000 and threshold income above £200,000 has £40,000 for the year, not £60,000. Carry forward from a tapered year is based on that year's tapered figure, so a past high-earning year may have less unused allowance than the table above suggests. An employer contribution counts in adjusted income, so the taper must be tested on the planned figure. **Money purchase annual allowance.** If the client has flexibly accessed a pension, the money purchase annual allowance of £10,000 applies to defined contribution savings. GOV.UK says unused MPAA cannot be carried forward, and previous years' allowance cannot be used to reduce an excess over it. **Tax relief on personal contributions.** Carry forward raises the amount that can go in without an annual allowance charge. It does not raise the amount of personal contributions that get tax relief, which is limited to the client's relevant UK earnings for the year. Large carry forward contributions are usually made by the employer for that reason. ## What goes on the review file - Pension input amounts for each of the last three years, from every scheme, with evidence (pension savings statements or provider confirmations). - Membership in each year. - Threshold and adjusted income for each year, to test the taper. - Whether the MPAA has been triggered. - The planned contribution and the order of use, as in the table above. Our [annual review checklist](https://aeolookup.com/financial-advisers/annual-review-checklist-financial-adviser-invitation-to-file-note/) is the natural place to add a carry forward line, and the [ongoing service review tracker](https://aeolookup.com/financial-advisers/ongoing-service-review-tracker-undelivered-fees/) can flag clients whose review falls after 5 April. Clients with large pensions will also want to see this alongside the [April 2027 inheritance tax change](https://aeolookup.com/financial-advisers/pension-iht-april-2027-workload-plan-advice-firm/). Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) builds AI staff who join an advice firm's team: they gather the pension savings statements, build the carry forward table and list the clients with 2023 to 2024 allowance at risk. The adviser reviews and signs every recommendation; the AI staff prepare, check and chase. This is general information, not financial advice. --- ![](https://aeolookup.com/img/d/owner-line.png) General information for UK small firms, not legal, tax or financial advice.