The pension planning mistakes that could catch families out before 5 April
The UK tax year ends on 5th April. It’s the same every year, yet individuals still trip up on the same pension planning mistakes which impact their families. Whether you’re protecting wealth for the next generation or building it quickly as a younger high earner, a quick check now could save you thousands.
Here’s what to look out for.
Mistake 1: Not knowing where you stand with the annual allowance
For most people, the annual allowance is £60,000 for the 2025/26 tax year. That’s the limit on the total value that may added to your pension before tax applies.
The catch? It’s not just what you pay yourself. Employer contributions count too. And if you’re lucky enough to be in a defined benefit scheme, the amount tested is based on how your benefits have grown, not the cash you put in.
Every year we see people surprised by this. They’ve counted their own contributions and thought they were safe, only to find they’ve tipped over the threshold.
Mistake 2: Letting the carry forward allowance slip through your fingers
If you haven’t used all your annual allowance in recent years, you can usually carry forward unused allowance from the previous three tax years. You normally need to have been a member of a registered pension scheme in those years, and you use the oldest year first.
Here’s the problem. Once you move past 5th April, the oldest carry-forward year falls away. Unused allowance from that earliest year can effectively expire. And once it’s gone, it’s gone.
One thing to remember: carry forward can increase the allowance you can use, but tax relief on personal contributions is still linked to your earnings in the current tax year.
Mistake 3: High earners forgetting about tapering
If your income is high enough, your £60,000 allowance can shrink. Tapering kicks in when threshold income is above £200,000 and adjusted income is above £260,000. The allowance reduces by £1 for every £2 of adjusted income over £260,000, down to a minimum of £10,000.
We see this catch people out, particularly when bonuses land or investment income spikes. It’s worth checking the numbers before the year ends.
Mistake 4: Not realising you've triggered the MPAA
If you’ve taken flexible taxable income from a defined contribution pension, you may have triggered the Money Purchase Annual Allowance (MPAA). That caps defined contribution pension saving at £10,000 a year. And carry forward doesn’t increase that £10,000 limit.
The real sting? Many people don’t realise they’ve triggered it. They take income thinking it’s harmless, then find their future pension contributions are severely restricted.
Mistake 5: Missing the value of employer contributions
For higher-rate taxpayers, pension funding often works best when it’s done through the employer, for example as part of a bonus decision. Employer contributions are made gross and can be powerful.
But they still use up annual allowance and can interact with tapering. If you’re making changes late in the tax year, check payroll cut-offs. What matters is when the contribution is received or allocated, not when you instructed it.
Other mistakes we see at year end
- Counting only your own payments. The annual allowance looks at the total added across all pensions, including what your employer puts in.
- Forgetting old schemes. A dormant workplace plan or an older SIPP still counts in the totals.
- Assuming a bank transfer on 5 April is enough. Providers and payroll have processing cut-offs.
- Not checking whether MPAA applies. It changes what safe contributions look like.
Your pre-5th April checklist
Before the tax year ends:
- Total up what’s been paid into pensions in this tax year (personal plus employer, across all schemes).
- Check carry forward and whether the oldest year is about to lapse.
- If your income is around £200k or more, test whether tapering could apply.
- If you’ve taken flexible income from a pension, confirm whether MPAA applies.
- Leave time for provider or payroll processing so contributions are received before 5 April.
The bottom line
Pensions rules include individual nuances: scheme types, how benefits are measured, and any historic protections you might have. If you’d like an independent second pair of eyes on your position before 5th April, we can review your current arrangements and help you spot anything you might have missed. Sometimes a quick conversation now saves a lot of money later.