- The Money Purchase Annual Allowance (MPAA) is triggered when individuals flexibly access their money purchase pension.
- Once triggered, contributions to money purchase schemes are limited to £10,000 per tax year, and carry forward is no longer available.
- MPAA does not affect defined benefit schemes.
Key takeaways from this article
1. What is the MPAA?
The MPAA is a reduced annual allowance for contributions into a money purchase pension scheme. It applies when an individual flexibly accesses their pension in certain ways. Once triggered, carry forward cannot be used for money purchase contributions.
2. How much is the MPAA?
The MPAA is currently £10,000 and applies from the moment it is triggered. You can pay more than £10,000 in the tax year the MPAA is triggered, provided:
- Contributions after the trigger do not exceed £10,000, and
- The total contributions before and after the trigger do not exceed the standard annual allowance plus any carry forward available.
Exceeding the above will result in an annual allowance charge.
The MPAA does not affect contributions to defined benefit (DB) schemes. You can still use the standard annual allowance and carry forward for DB contributions, as long as:
3. Triggers vs Non-Triggers
Triggers MPAA
- Taking income from a flexi-access drawdown fund
- Automatic conversion of flexible drawdown to flexi-access drawdown
- Taking income from capped drawdown above the capped limit
- Converting capped drawdown to flexi-access drawdown and then taking income
- Taking an uncrystallised funds pension lump sum (UFPLS)
- Taking a stand-alone lump sum with primary protection
- Purchasing an annuity that allows income decreases
- Receiving a scheme pension from a money purchase scheme with fewer than 12 members
- Any of the above in an overseas pension scheme with UK tax relief
Does NOT Trigger MPAA
- Tax-free cash (pension commencement lump sum)
- Trivial commutation lump sum
- Small pots
- Income from capped drawdown within the capped limit Income from beneficiary’s flexi-access drawdown
- Scheme pension under a money purchase arrangement with at least 12 members
- Purchasing an annuity that cannot decrease except in prescribed circumstances
4. Information requirements
- When a member triggers the MPAA, the scheme administrator must notify them within 31 days.
- If the member transfers to a new scheme, the administrator has 31 days to inform the receiving scheme.
- A member who has triggered the MPAA must tell any other scheme where contributions are being paid within 91 days.
5. Previous MPAA limits
- 2017/18 – 2022/23: £4,000
- 2016/17: £10,000
Updated January 2026
The information provided in this article is not intended to offer advice.
It is based on Quilter's interpretation of the relevant law and is correct at the date shown. While we believe this interpretation to be correct, we cannot guarantee it. Quilter cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.