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A Tapered Annual Allowance

See what could happen to your Annual Allowance if you're a high earner

What is a Tapered Annual Allowance?

A Tapered Annual Allowance (AA) is lower than the standard AA  and applies to those on a higher income.

Will it affect me?

Tapering only applies if you have both a Threshold Income over £200,000 and an adjusted income over £260,000 (this applies from 6 April 2023 – if you’re looking at an earlier year then see our FAQs below).

To help you estimate whether the Tapered AA will apply to you, give our Contributions & Tax Calculator a go. It’ll give you an idea of how much AA you’ve used up in a tax year, and an estimate of your Tapered AA. Or you can use our worksheet.

You’ll need to work out your threshold and adjusted income yourself – or with the help of a financial adviser. If you want to seek guidance or take financial advice on the options available to you, visit the guidance and financial advice page. You’ll find a range of resources to support your planning and you can also find information on how to access an independent financial adviser.

Sign up for a free Focus on Pension Tax webinar to learn more about pension tax, including USS specific tax mitigation options.

Here’s how the taper works

Your standard AA is reduced by £1 (to a minimum AA of £10,000) for every £2 of your adjusted income over £260,000. This table gives an example of what your Tapered AA might look like:

Adjusted income Tapered AA
£360,000 and above £10,000
£350,000 £15,000
£340,000 £20,000
£330,000 £25,000
£320,000 £30,000
£310,000 £35,000
£300,000 £40,000
£290,000 £45,000
£280,000 £50,000
£270,000 £55,000
£260,000 and below £60,000

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