The standard amount that may be contributed to a pension each year and upon which tax relief is granted is £40,000. 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 £4,000 pa; this is the Money Purchase Annual Allowance (MPAA).

The table below summarises key pension actions and indicates whether or not the MPAA is trigerred for each.

See also:

Tax free cash

Flexi access drawdown

Capped drawdown

Uncrystalised funds pension lump sum (UFPLS)

Annuity

Small pot