How the £60,000 pension annual allowance shrinks for high earners: adjusted income over £260,000, threshold income over £200,000, the £1-for-£2 taper down to £10,000 — with worked examples.
Most people can put up to £60,000 a year into pensions with tax relief (or 100% of earnings if lower). For high earners the allowance is tapered: above certain income levels it shrinks by £1 for every £2 of extra income, down to a floor of £10,000.
The taper only bites when you fail both tests. Your threshold income (broadly, taxable income minus your own pension contributions) must exceed £200,000, and your adjusted income (broadly, taxable income plus employer pension contributions) must exceed £260,000. Fail only one and you keep the full £60,000 — which is why a well-timed personal contribution can sometimes take you back under the threshold-income line entirely.
Adjusted income £300,000 (threshold income above £200,000): you are £40,000 over the £260,000 line, so the allowance falls by £20,000 — to £40,000. Adjusted income £360,000 or more: the taper reaches its floor and your allowance is £10,000. Adjusted income £250,000: below the line, full £60,000 — regardless of threshold income.
Unused allowance from the previous three tax years can be carried forward — including years in which you were tapered (you carry forward the unused part of your tapered allowance for those years). And once you flexibly access a pension, the separate £10,000 Money Purchase Annual Allowance applies to money-purchase contributions instead, with no carry-forward at all.
Hundred Summers models the taper, carry-forward and the MPAA inside its projections — contributions above your available allowance simply get no relief in the model, and the Methodology page states every rule it applies.