What Are the Pension Contribution Limits in 2026?
The pension annual allowance is £60,000 in 2026/27. Here's everything you need to know about contribution limits, carry forward, and the money purchase annual allowance.
Pension Contribution Limits 2026/27
Understanding how much you can contribute to a pension each year is essential for effective retirement planning. The rules changed significantly in April 2023 when the Lifetime Allowance (LTA) was effectively abolished, and the Annual Allowance (AA) was increased. Here is a guide to the limits that apply in 2026/27.
The Annual Allowance (AA)
The Annual Allowance is the maximum amount you can contribute to all your pensions in a single tax year while still receiving tax relief. In 2026/27, the Annual Allowance is £60,000.
This includes:
- Your own contributions
- Employer contributions
- Any third-party contributions (e.g. from a spouse or parent)
If your total pension input across all schemes exceeds £60,000 in a tax year, you will face an Annual Allowance charge on the excess, taxed at your marginal income tax rate.
The Money Purchase Annual Allowance (MPAA)
If you have already flexibly accessed your pension — for example, by taking income from a drawdown arrangement or receiving an uncrystallised funds pension lump sum (UFPLS) — a lower limit called the Money Purchase Annual Allowance (MPAA) applies to future defined contribution (money purchase) pension contributions.
The MPAA is currently £10,000 per tax year. This limit was increased from £4,000 in April 2023 and remains at £10,000 in 2026/27.
The MPAA does not apply to defined benefit accrual — you can still accrue DB benefits up to the standard Annual Allowance.
Carry Forward
If you have unused Annual Allowance from the previous three tax years, you may be able to carry it forward and contribute more than £60,000 in a single year. Carry forward is not available once the MPAA has been triggered.
To use carry forward, you must have been a member of a registered pension scheme in each year you wish to carry from, even if you made no contributions.
The Tapered Annual Allowance
High earners may be subject to the Tapered Annual Allowance. For those with adjusted income above £260,000 (in 2026/27), the Annual Allowance reduces by £1 for every £2 of income above this threshold, down to a minimum of £10,000.
The taper threshold was increased from £240,000 in April 2023. This is a complex area and professional advice is strongly recommended for those with high incomes.
The Lifetime Allowance
The Lifetime Allowance (LTA) was effectively abolished from April 2024 (following its abolition announcement in 2023). There is no longer a cap on the total amount you can accumulate across all your pensions over a lifetime for tax purposes, though a Lump Sum Allowance (LSA) of £268,275 still caps the amount of tax-free cash you can receive in total across all pension arrangements.
Summary
- Annual Allowance: £60,000 (2026/27)
- MPAA (after flexible access): £10,000
- Tapered AA minimum: £10,000 (adjusted income above £260,000)
- Lump Sum Allowance (tax-free cash cap): £268,275
Speak to a qualified financial adviser for personal guidance on pension contributions and how the limits apply to your circumstances.