The money purchase annual allowance (MPAA) is a limit on pension contributions before you pay a tax charge, which is lower than the normal annual allowance.
It may apply if you have taken taxable money from a pension. Taking taxable money from a pension can include:
- taking money through drawdown
- taking an Uncrystallised Funds Pension Lump Sum
- buying some types of annuity
Your pension provider should tell you if it applies to you.
The MPAA is currently £10,000.
This means up to £10,000 can be added to your defined contribution pensions each tax year before you may need to pay a tax charge.
This includes:
- money you pay in
- money your employer pays in
- tax relief added by HMRC
The MPAA applies for:
| Tax year | Money Purchase Annual Allowance |
|---|---|
| 2026/27 | £10,000 |
| 2025/26 | £10,000 |
| 2024/25 | £10,000 |
| 2023/24 | £10,000 |