Money Purchase Annual Allowance (MPAA)
The standard amount that may be contributed to a pension each year and upon which tax relief is granted is £60,000. This can be reduced by a range of factors; see Contribution.
One such factor is whether an individual has drawn pension benefits. When a policy holder of a Defined Contribution (DC) Pension starts to draw on their pension, any future tax relievable contributions will be limited to £10,000 pa; this is the Money Purchase Annual Allowance (MPAA). These figures are relevant for 2025/26 tax year.
The table below summarises key pension actions and indicates whether or not the MPAA is trigerred for each.
See also:
Last updated:
8 September 2025 at 09:32:07
Disclaimer
This glossary definition has been deliberately kept as simple as possible to give a brief outline of the term to assist with general financial knowledge. It is not intended to give a detailed explanation. Please refer to our Legal Declarations.