MPAA (Money Purchase Annual Allowance)
A reduced annual allowance of £10,000 that applies to DC pension contributions after you've flexibly accessed any DC pension income.
The MPAA is triggered when you take any taxable income from a DC pension — via drawdown, UFPLS, or an uncrystallised lump sum. Once triggered, it's permanent and irreversible. Your annual allowance for future DC contributions drops from £60,000 to just £10,000.
Importantly, taking tax-free cash alone does NOT trigger the MPAA. Buying a standard lifetime annuity (where income only goes up or stays the same) does not trigger it either. A flexible or variable annuity that allows income to decrease IS a trigger event under HMRC PTM056520. The MPAA only restricts DC contributions — if you're also in a DB scheme, your DB accrual is tested against a separate 'alternative annual allowance' of £50,000.
This calculator provides estimates based on 2026/27 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.