The pension annual allowance taper calculator checks whether your 2026/27 annual allowance of £60,000 is reduced because of high income. If your threshold income exceeds £200,000 and adjusted income exceeds £260,000, the taper cuts your allowance by £1 for every £2 above £260,000 — down to a minimum of £10,000.
Threshold and adjusted income
The taper applies when both conditions are met: threshold income above £200,000 and adjusted income above £260,000. If your threshold income is £200,000 or below, the taper does not apply even if adjusted income is much higher.
| Adjusted income | Taper reduction | Tapered AA |
|---|---|---|
| £260,000 or below | £0 | £60,000 |
| £280,000 | £10,000 | £50,000 |
| £300,000 | £20,000 | £40,000 |
| £320,000 | £30,000 | £30,000 |
| £360,000+ | £50,000 | £10,000 |
If your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, your £60,000 annual allowance is reduced by £1 for every £2 of adjusted income above £260,000. The minimum tapered allowance is £10,000, reached at an adjusted income of £360,000 or more.
Threshold income is your total taxable income minus personal pension contributions (but before adding employer contributions). Adjusted income is your total taxable income plus all pension contributions including employer contributions. Both must exceed their respective limits for the taper to apply.
Yes. You can carry forward unused annual allowance from the previous three tax years. This is particularly valuable if the taper reduces your current-year allowance but you had unused allowance in years when your income was lower. Use the pension carry forward calculator to check your total available allowance.
The most effective approach is salary sacrifice, which reduces both your threshold and adjusted income. Other strategies include timing bonus payments, spreading pension contributions across tax years, or ensuring your threshold income stays at or below £200,000 — if it does, the taper does not apply regardless of adjusted income.
Yes. Employer contributions count toward your annual allowance. If the taper reduces your allowance and your combined employee and employer contributions exceed it, you face an annual allowance charge at your marginal Income Tax rate on the excess.
If your total pension contributions exceed your tapered annual allowance, the excess is taxed at your marginal Income Tax rate — 40% or 45% for most people affected by the taper. You can pay the charge directly or ask your pension scheme to pay it from your pension pot (Scheme Pays) if the charge is over £2,000.
