What is the Money Purchase Annual Allowance?

If you have flexibly accessed your pension, your annual allowance for money purchase contributions is reduced to GBP 10,000 (the MPAA). This prevents recycling of tax-free lump sums.

How much can I contribute with tax relief?

Relief is available on contributions up to 100% of relevant UK earnings, subject to an annual allowance of GBP 60,000. Cite: FA 2004 ss.188, 228.

Is the annual allowance reduced for high earners?

Yes -- it tapers by GBP 1 for every GBP 2 of adjusted income above GBP 260,000 down to a floor of GBP 10,000. Cite: FA 2004 s.228ZA.

UK Pension Tax Calculator

Calculate pension tax relief and withdrawal tax

Pension contributions receive tax relief at your marginal rate. The annual allowance is GBP 60,000 (tapered for high earners above GBP 260,000 adjusted income, minimum GBP 10,000). When withdrawing, 25% of your pension pot is tax-free (capped at GBP 268,275) and the rest is taxed as income.

Frequently Asked Questions

What is the Money Purchase Annual Allowance?+
How much can I contribute with tax relief?+
Is the annual allowance reduced for high earners?+