Carry Forward Tools & Guides
Carry Forward Timeline
1
Current Year (2026/27)
Use £60,000 allowance first (or tapered amount)
2
2025/26
Up to £60,000 unused allowance available
3
2024/25
Up to £60,000 unused allowance available
4
2023/24
Up to £60,000 unused allowance available
What is Carry Forward?
Carry Forward allows you to use any unused Annual Allowance from the previous three tax years. Key points:
•Standard Annual Allowance is £60,000 (2026/27)
•Can look back up to three tax years
•Must use current year's allowance first
•Must have been a member of a UK pension scheme in the year from which you wish to carry forward
•Particularly valuable for NHS staff with significant pension growth
This can help you make additional pension contributions or manage tax charges from high pension growth.
How to Calculate Unused Allowance
To calculate your unused Annual Allowance:
1. Current Year (2026/27):
• Start with £60,000 standard allowance
• Subtract pension growth for current year
• Must use current year's allowance first
2. Previous Three Years:
2025/26: Up to £60,000 available
2024/25: Up to £60,000 available
2023/24: Up to £60,000 available
Important Notes:
•Tapered Annual Allowance affects available amounts
•McCloud remedy choices may affect historical calculations
•Must have been in a pension scheme each year
Impact of Tapering
Tapered Annual Allowance affects Carry Forward calculations:
Historical Tapered Amounts:
2023/24 to 2026/27:
•Threshold Income: £200,000
•Adjusted Income: £260,000
•Minimum allowance: £10,000
2020/21 to 2022/23:
•Threshold Income: £200,000
•Adjusted Income: £240,000
•Minimum allowance: £4,000
When calculating Carry Forward:
•Must use the tapered amount for each year if applicable
•Cannot carry forward more than the tapered amount
•Keep records of threshold and adjusted income calculations
When to Use Carry Forward
Common scenarios for using Carry Forward:
1. Significant Pension Growth:
• Promotion or pay increase
• Additional sessions/overtime
• Multiple NHS roles
• Clinical Excellence Awards
2. Additional Contributions:
• Making up for career breaks
• Increasing retirement benefits
• Tax-efficient saving
3. Managing Tax Charges:
• Reducing or eliminating AA charges
• Planning for known pension growth
• Strategic retirement planning
Record Keeping
Essential records to maintain:
1. Annual Documents:
• Pension Savings Statements
• P60s and payslips
• Self-assessment returns
• Pension growth calculations
2. Historical Information:
• Previous years' allowances
• Tapered AA calculations
• Scheme Pays elections
• Pension input amounts
3. Supporting Evidence:
• Promotion letters
• Additional role contracts
• Clinical Excellence Awards
• Any correspondence with NHS Pensions
Record Keeping Essential
Carry Forward requires detailed record keeping of previous years' pension growth and allowances. Keep all Pension Savings Statements, P60s, and documentation of promotions or additional work that affects your pension growth.
Required Actions
1
Gather historical data
Collect pension statements and growth information for previous three years
2
Calculate unused allowances
Determine available carry forward from each qualifying year
3
Plan strategically
Use carry forward to manage expected pension growth or make additional contributions
4
Seek professional advice
Consider financial advice for complex carry forward situations