You can pay up to £60,000 into a SIPP in the 2025-26 tax year, or 100% of your qualifying UK earnings if that figure is lower. That £60,000 ceiling covers your personal contributions, any employer contributions, and the basic-rate tax relief added by HMRC, and it applies across every pension you hold, not to each one separately. Several rules can push the limit lower or, with unused allowance from earlier years, higher.
The £60,000 Annual Allowance
The annual allowance is the total that can go into your pensions in a single tax year (6 April to 5 April) before a tax charge applies. For 2025-26 and 2026-27, that figure is £60,000.1HM Revenue & Customs. Pension Schemes Rates and Allowances
Three things count toward it: what you pay in personally, what an employer pays in, and the basic-rate relief your SIPP provider claims from HMRC on your behalf. So if you contribute £48,000 out of your own pocket, the provider adds £12,000 in relief, and the whole £60,000 is used. If you also have a workplace pension, employer contributions there stack on top of anything you’ve already put into the SIPP. It’s easy to overshoot when a workplace scheme and a SIPP are both being funded, so tracking both matters.
The Earnings Cap and the £3,600 Floor
Your personal tax-relieved contributions can’t exceed 100% of your qualifying UK earnings for the year. Qualifying earnings mean salary, bonuses, commissions, and trading profits. Dividends and rental income don’t count.2GOV.UK. PTM044100 – Contributions: Tax Relief for Members: Conditions Earn £35,000 and you can put in £35,000 with relief. Earn £80,000 and the £60,000 annual allowance bites first.
With no earnings at all, you can still contribute £3,600 gross a year. You pay £2,880 and the government tops it up with £720.1HM Revenue & Customs. Pension Schemes Rates and Allowances That’s what makes SIPPs workable for a non-earning spouse or someone on a career break.
The 100% earnings cap applies to your own contributions and the relief on them. Employer contributions aren’t restricted by your earnings level, though they still eat into the £60,000 annual allowance.
Carry Forward: Going Above £60,000
If you haven’t used the full allowance in recent years, carry forward lets you go over £60,000 in one go by reclaiming unused allowance from the three previous tax years.3GOV.UK. PTM055100 – Annual Allowance: Carry Forward: General
Two conditions apply. You must have been a member of a registered pension scheme in each year you want to carry forward from — a SIPP sitting open with a zero balance is enough. And you have to use the current year’s £60,000 first, then work through unused allowance starting with the oldest of the three years. Someone who put nothing away for three years could, in theory, contribute £240,000 in a single tax year: £60,000 for the current year plus £60,000 from each of the three prior ones. You still need earnings to match, because the 100% limit doesn’t budge.
Carry forward tends to matter after a bonus, a business sale, or any year with unusually spare cash.
The Taper for High Earners
Above certain income levels, the annual allowance shrinks. The taper kicks in when threshold income exceeds £200,000 and adjusted income exceeds £260,000. Threshold income is broadly your net income before pension contributions; adjusted income adds employer pension contributions back in.4GOV.UK. Work Out Your Reduced (Tapered) Annual Allowance
Both tests have to be met. If threshold income sits at £200,000 or below, the taper doesn’t apply no matter how high adjusted income is. For anyone caught by both, the allowance drops by £1 for every £2 of adjusted income above £260,000, down to a floor of £10,000. That floor hits at £360,000.1HM Revenue & Customs. Pension Schemes Rates and Allowances
At £300,000 of adjusted income, you’re £40,000 over the trigger. Half of that is £20,000, so the allowance falls from £60,000 to £40,000. Anyone in this band should run the numbers before making year-end contributions.
The £10,000 MPAA After Taking Pension Income
Once you start drawing taxable income from a defined contribution pension, a permanently lower cap called the money purchase annual allowance takes over. The MPAA is £10,000, and once triggered it applies for life.5HM Revenue & Customs. Abolition of Lifetime Allowance and Increases to Pension Tax Limits
Triggers include taking taxable income through flexi-access drawdown and taking an uncrystallised funds pension lump sum. Taking only the 25% tax-free lump sum does not trigger it, and neither does transferring a pot between providers. Someone who crystallises their pension, takes the tax-free cash, and leaves the rest invested is still on the full £60,000. Carry forward can’t be used to lift the £10,000 MPAA cap on money purchase contributions.
What Happens If You Go Over
Exceeding the annual allowance triggers the annual allowance charge. The excess is added to your taxable income for the year and taxed at your marginal rate.1HM Revenue & Customs. Pension Schemes Rates and Allowances A 40% taxpayer who overshoots by £5,000 owes £2,000. For additional-rate taxpayers, the charge wipes out most of the benefit of the extra contribution.
The charge is reported through self-assessment.6GOV.UK. PTM056200 – Annual Allowance: Tax Charge: Telling HMRC Your pension scheme should send a pension savings statement by 6 October after the end of the tax year if you’ve breached the allowance, with the figures you need for the return.
Contributions After Age 75
You can keep paying into a SIPP after 75, but the contributions no longer attract tax relief.1HM Revenue & Customs. Pension Schemes Rates and Allowances Below 75, a £10,000 gross contribution costs £8,000 out of pocket, and less again for higher-rate taxpayers claiming the extra back. After 75, £10,000 in costs a full £10,000. Employer contributions after 75 also lose relief. The investments still grow free of capital gains tax and income tax, so a case can exist for continuing, but the upfront boost that drives most pension contributions is gone.
The Lifetime Allowance Is Gone
Until April 2024, a separate cap called the lifetime allowance limited the total value of all your pension savings. It has been abolished, so there’s no ceiling now on how large a SIPP can grow before triggering a charge on the fund itself. Two related caps did survive: a £268,275 lump sum allowance on tax-free cash, and a £1,073,100 lump sum and death benefit allowance covering combined tax-free lump sums and certain death benefits.7GOV.UK. Abolition of the Lifetime Allowance (LTA) Those affect what you can take out tax-free, not what you can pay in.