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Pension carry forward rule

What carry forward is and who could benefit

This year's pension annual allowance is as low as £10,000 for some high earners.

However, pension carry forward is a rule that allows some people to contribute more and receive extra tax relief.

Remember: tax rules can change and the value of tax benefits depends on your individual circumstances.

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

Pension carry forward rules - the basics

The principle is simple: if you haven’t used your full annual allowance in any of the last three tax years (see below), carry forward allows you to make up for that and contribute up to an additional £120,000 this tax year. If you're a 45% taxpayer, this could secure you up to an extra £54,000 tax relief.

However, there are some restrictions. To qualify for carry forward, you must also:

  • Have had a pension in each of the years from which you are carrying forward, even if you haven't contributed to it (the State Pension doesn't count);
  • Have earnings of at least the amount you are contributing. For instance, to make a contribution of £120,000 and receive up to £54,000 tax relief you must have earnings of at least £120,000 this tax year.

There are other factors to consider if you or your employer have contributed to other pensions in addition to your SIPP or you have been a member of a final salary scheme - please download the Annual Allowance & Carry Forward Factsheet for details.

Carry forward calculator

How much could you contribute to your pension this tax year?

Calculate how much you could contribute

What's the maximum I can carry forward?

The amount you can carry forward depends on how much unused annual allowance you have in each of the last three tax years (see below). You must include your own pension contributions, any made by your employer and the value of any benefits built up in a defined benefit (e.g. final salary) scheme.

Tax year Annual allowance
2015/16 £40,000*
2016/17 £40,000**
2017/18 £40,000**

* For the 2015/16 tax year, only contributions made from 9 July 2015 to 5 April 2016 are usually included. The exception is if total contributions registered from 6 April 2015 to 8 July 2015 were worth more than £40,000 - if this applies, see our factsheet for details.

**Can be lower if your adjusted income was over £150,000. See our factsheet for details.

How does it work? An example

This example should give you an idea of how the principle works in practice.

Your total
What you can
carry forward
2015/16 £40,000* £15,000 £25,000
2016/17 £40,000** £5,000 £35,000
2017/18 £40,000** £40,000 £0
What you can carry forward
(and contribute in addition to your current annual allowance)

*All contributions made after 8 July 2015.

**Can be lower if your adjusted income was over £150,000. See our factsheet for details.

Contributions you make using carry forward can benefit from pension tax relief. The government automatically pays 20% of your contribution. You can then claim back more through your tax return. Higher-rate taxpayers can claim back up to an extra 20% and top-rate taxpayers up to an extra 25%. If you’re a Scottish taxpayer the amount of tax relief you can claim is different. Take a look at our information on the Scottish income tax changes page.

Find out more about pension tax relief

Use the pension tax relief calculator to see how much you could receive


The deadline for contributions that qualify for this year's tax relief is 5 April 2019.

If you plan to contribute by cheque, you should allow sufficient time to ensure the cheque reaches us in time.

If you have more than one pension, or have been a member of a final salary scheme, you should also allow more time, as you might need to obtain information about your contributions from your pension administrator.

Next steps to consider

Remember when contributing to a pension, you're investing for your retirement. You can normally only access the money from age 55 (57 from 2028), up to 25% usually tax free and the rest taxed as income.

If you want to save for your retirement and take advantage of these valuable tax breaks, you could consider making a pension contribution. If you're happy making your own investment decisions, you can apply online for the Vantage SIPP and make a contribution in just a few minutes.

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