Answers · UK 2025/26
What is the Money Purchase Annual Allowance (MPAA) and when is it triggered?
The MPAA is a reduced annual allowance of £10,000 that applies to defined contribution (money purchase) pensions once you have flexibly accessed your pension -- for example, by taking drawdown income or a flexible annuity. It prevents people from recycling pension tax relief by cashing out and re-contributing.
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The Money Purchase Annual Allowance (MPAA) is a restriction on pension contributions that kicks in once you have flexibly accessed a defined contribution (DC) pension. In 2026/27 the MPAA is £10,000. **What triggers the MPAA?** You trigger the MPAA if you: - Take income from a flexi-access drawdown fund - Take an uncrystallised funds pension lump sum (UFPLS) - Take income from a flexible annuity that can decrease - Take a payment from a flexible defined benefit scheme You do NOT trigger the MPAA by: - Taking your 25% tax-free PCLS alone - Buying a conventional (non-flexible) lifetime annuity - Taking a small pot payment (pots under £10,000) **What does it mean in practice?** Normally the pension Annual Allowance is £60,000 (or 100% of earnings, whichever is lower). Once the MPAA is triggered, your allowance for money purchase pensions drops to just £10,000. You can still contribute up to the remaining standard allowance (£60,000 - £10,000 = £50,000) into a defined benefit scheme, but this is rarely relevant for most workers. **Worked example** Sarah, aged 57, enters drawdown in January 2026 and starts taking income. Her employer continues contributing 5% of her £40,000 salary (£2,000/year) into her workplace DC pension. Sarah also wants to make additional personal contributions. With the MPAA of £10,000: - Employer contribution: £2,000 - Maximum additional personal contribution: £8,000 - Total contributions allowed: £10,000 If Sarah tried to contribute £15,000 in total, she would have a £5,000 annual allowance charge. **Notification requirement** Your pension provider must notify you when you trigger the MPAA. You in turn must notify any other pension provider you contribute to within 91 days. **Carry forward** Crucially, you cannot use pension carry forward to increase above the £10,000 MPAA for money purchase contributions. Carry forward only applies to the main Annual Allowance.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.