Answers · UK 2025/26
What is the Money Purchase Annual Allowance for 2026/27?
The Money Purchase Annual Allowance (MPAA) for 2026/27 is £10,000. It replaces your normal £60,000 annual allowance for defined contribution pensions once you have flexibly accessed a pension, for example by taking taxable income from drawdown. Contributions above £10,000 then attract a tax charge.
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The Money Purchase Annual Allowance (MPAA) is a reduced pension contribution limit that applies once you have flexibly accessed a defined contribution pension. For 2026/27 it is £10,000, down from the standard £60,000 annual allowance. The MPAA is triggered when you take taxable money from a pension flexibly, for example by drawing income from flexi-access drawdown, taking an uncrystallised funds pension lump sum, or buying certain flexible annuities. It is not triggered simply by taking your 25% tax-free lump sum and putting the rest into drawdown without drawing income, nor by taking a small pot lump sum under £10,000, nor by buying a lifetime annuity that pays a fixed income. Once triggered, you can still contribute up to £10,000 a year to money purchase pensions with tax relief, but contributions above that face an annual allowance charge at your marginal rate. The MPAA also removes the ability to carry forward unused allowance for money purchase contributions. This rule exists to stop people recycling pension income back into a pension to gain extra tax relief. If you have a defined benefit pension as well, a separate alternative annual allowance may apply to it. Always check whether accessing your pension will trigger the MPAA before you do so. Use the Pension Contribution calculator to model how much you can still pay in.
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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.