Money Purchase Annual Allowance

Chancellor Philip Hammond announced that the Money Purchase Annual Allowance (MPAA), an annual amount individuals can contribute to defined contribution pensions after having previously accessed a pension flexibly, will be reduced from £10,000 to £4,000 and come into force from April 2017.

This announcement will affect taxpayers (employees and self-employed) who have withdrawn amounts from their pension fund and then want to top the fund up again. The £10,000 limit was introduced in April 2015.

The Chancellor said the decision was taken ‘to prevent inappropriate double tax relief,’ and the Government would consult on further details for the plans.

In a consultation released alongside the Autumn Statement, the Government said:

‘The Government believes that an allowance of £4,000 is fair and reasonable and should allow people who need to access their pension savings to rebuild them if they subsequently have