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Pension carry forward

How to increase your pension allowance

Important information: SIPPs are a type of pension for people happy to make their own investment decisions. Investments can rise and fall in value so you could get back less than you pay in. You’ll usually need to be at least 55 (rising to 57 from 2028) before you can access the money in your pension. Pension and tax rules can change and any benefits will depend on your circumstances. If you’re not sure what’s best for your situation, you should seek financial advice.

What is pension carry forward?

Generally the most you can pay into your pension each tax year is as much as you earn, up to £40,000.

If you want to make the most of your pension savings and tax allowances, carry forward lets you take advantage of any unused pension allowance from the previous three tax years.

Including the current tax year, that could mean you’re able to make a pension contribution of up to £160,000 including tax relief.

Guide to pension tax relief


If you want to claim back the full amount of tax relief, you have to pay enough tax at the relevant rate. Our tax relief calculator can show you how much you could get. Please remember tax rules can change and any benefits will depend on your circumstances. Scottish income tax rates and bands are different.

The benefits for high earners

As a high earner, you may be affected by the tapered annual allowance.

The taper could reduce your annual allowance to as little as £4,000 if you have an ‘adjusted income’ of over £240,000. Adjusted income is your total income, plus the pension contributions your employer pays in for you.

Making the most of any unused pension allowance, using carry forward, means you could pay more in and get extra tax relief.

Who can use pension carry forward?

There are two main requirements:

  • You had a pension in each year you wish to carry forward from, whether or not you made a contribution (the State Pension doesn’t count).
  • You have earnings of at least the total amount you are contributing this tax year. Alternatively, your employer could contribute to your pension.

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. Learn more in our Annual Allowance & Carry Forward Factsheet.

How much could you contribute?

It can be confusing, so here’s an example to show you how it works. You can also use our carry forward calculator to get an idea of how much you might be able to pay in.

Tax year Annual allowance Contributions made Unused allowance
2019/20 £40,000 £15,000 £25,000
2020/21 £40,000 £5,000 £35,000
2021/22 £40,000 £40,000 £0
2022/23 (current) £40,000 £40,000 £0
Remaining allowance in 2022/23 using carry forward: £60,000

The tapered annual allowance might have applied for the three previous tax years (19/20, 20/21 and 21/22). This means the standard £40,000 annual allowance could be reduced. If you had an adjusted income over £150,000 in the 19/20 tax year your allowance could have been as little as £10,000. In the 20/21 and 21/22 tax years your annual allowance could have been reduced to £4,000 if you had an adjusted income over £240,000.

This £4,000 tapered allowance could also apply to the current tax year (22/23).

You’ll need to check whether the tapered annual allowance applies to you, as this will impact how much you can carry forward from previous tax years.

Remember, you normally need to be at least 55 (57 from 2028) before you can access money in your pension. Up to 25% can usually be taken tax free and the rest will be taxed as income.

Try our carry forward calculator

How to make a pension contribution

To make the most of any matching employer contributions, you could consider making a payment into your workplace pension (if you have one).

If you don’t have a workplace pension, or if you can’t get any more matching contributions from your employer, you could consider opening your own private pension such as the HL Self-Invested Personal Pension.

You’ll need to be comfortable making your own investment decisions, but you don’t need to make any investment decisions straight away. You can add money before the tax year deadline, get tax relief, and choose investments in your own time.

More about the HL SIPP