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Annual allowance · The charge & checking

Has my client breached the annual allowance? A decision aid

Four questions that tell you which annual-allowance rules are in point — the standard £60,000, the high-earner taper, the MPAA and carry forward — and route you to the calculator for the figure.

3 min read · Last reviewed

— In short

The ordinary test compares total pension input with the £60,000 annual allowance, adjusted for taper and carry-forward. After flexible access, post-trigger DC input also faces the £10,000 MPAA, which carry-forward cannot increase. If that limit is exceeded, compare default and alternative chargeable amounts; otherwise use the ordinary total-input test. The MPAA does not replace the whole annual allowance: this triage identifies relevant rules, and the calculator works the figure.

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Use the Pension Annual Allowance calculator with your figures and see the working. Free, with no sign-up required.

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Calculators for this topic (5)

A pension annual allowance charge turns on four things: how much went in this year, whether the high-earner taper applies, whether the member has triggered the money purchase annual allowance, and whether carry forward can absorb an excess. Answer the four questions below and the aid shows which rules engage. Then confirm the figure on the calculator.

Decision aid · Has the annual allowance been breached?
Roughly how much went into pensions this tax year (member + employer + any DB growth)?
Is the member a high earner — broadly, adjusted income over £260,000?
Have they flexibly accessed a DC pension (drawdown income or a UFPLS)?
Do they have unused allowance from the previous three years (carry forward)?

Answer the four questions above to see which annual-allowance rules are in point.

What each answer engages

The standard allowance. Most members have a £60,000 annual allowance (PTM051100). Input below it, with no taper and no MPAA, means a charge is unlikely. Input at or above it includes exactly £60,000, which does not exceed an unreduced £60,000 allowance; the exact total, taper, MPAA and carry-forward still need checking.

The taper. If adjusted income exceeds £260,000 (and threshold income exceeds £200,000), the allowance falls by £1 for every £2, to a £10,000 floor (PTM057100) — so a charge can arise even on input under £60,000. The two income tests are unpicked in threshold income vs adjusted income.

The MPAA. A trigger alone does not establish a charge. Check post-trigger DC input against £10,000: if it is not exceeded, use the ordinary total-input test; if it is exceeded, compare default and alternative chargeable amounts. Carry forward cannot increase the MPAA (PTM056510) — see does a UFPLS trigger the MPAA?.

Carry forward. Unused allowance from the previous three years is added before the excess is worked out (PTM055100), but never against the MPAA — the detail is in carry-forward of unused annual allowance.

The aid states which rules are in point; it does not work the number. For the exact position — the taper, the MPAA and carry forward computed together with the chargeable excess and the charge — run the pension annual allowance calculator, and for how the charge itself is then worked, see how the annual allowance charge is calculated.

PTM051100 (standard allowance) · PTM055100 (carry forward) · PTM057100 (taper) · PTM056510 (MPAA)

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Put this to work.

Open the Pension Annual Allowance calculator and enter your client's figures. Pension Annual Allowance calculator

Create a free account for guided calculations, no card needed. Where a calculator offers a compliance annex PDF, the annex sets out the calculation and its HMRC references, with your firm’s name on every page. If you have edited a calculator here, those inputs stay in this browser for 15 minutes after you click below.

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Use made-up figures until your firm holds our DPA.

Sample compliance annex for a fictional clientSee a sample annex, worked example for 2025-26 (PDF)

Common questions

How do I know if my client has an annual allowance charge?
Test total pension input against the ordinary allowance with any taper and carry-forward. After a trigger, also establish whether post-trigger DC exceeds the £10,000 MPAA. If it does, compare default and alternative chargeable amounts. Carry-forward cannot increase the MPAA; it does not replace the allowance for all pension input.
Can a charge arise on input under £60,000?
Yes. The taper can cut a high earner’s allowance to as little as £10,000, and after an MPAA trigger DC input over £10,000 is chargeable regardless of carry forward. So input well under £60,000 can still produce a charge.
Does this tool calculate the charge?
No — it is a triage that tells you which rules are in point and routes you to the pension annual allowance calculator, which works the exact figure with the taper, the MPAA and carry forward. It states rules; it does not advise.

Sources

Based on HMRC’s Pensions Tax Manual (PTM055100, PTM056510, PTM057100) and Finance Act 2004.

  1. HMRC Pensions Tax Manual, PTM051100 — Annual allowance: essential principles gov.uk
  2. HMRC Pensions Tax Manual, PTM055100 — Annual allowance: carry forward: general gov.uk
  3. HMRC Pensions Tax Manual, PTM057100 — Annual allowance: tapered annual allowance gov.uk
  4. HMRC Pensions Tax Manual, PTM056510 — Annual allowance: money purchase annual allowance: general gov.uk

For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.