What is the Money Purchase Annual Allowance (MPAA)?

If you take money from a defined contribution pension, the amount you can put in while still getting tax relief could be reduced. For most people, the total amount you can contribute is £60,000 each tax year. If you go above the MPAA, this reduces to £10,000 a year. 
MPAA can be triggered if:

  • you take your entire pension pot as a lump sum or start to take lump sums from your pension pot. Also called UFPLS (uncrystallised funds pension lump sum)

  • you move your pension pot money into drawdown and begin to take an income

  • if you have a pre-April 2015 capped drawdown plan and start taking payments that exceed the allowance, we suggest contacting PensionWise or seeking financial advice to clarify 

Check if you’ve gone above the money purchase annual allowance

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