This term refers to the limit on the amount you can save into your pension each tax year and get tax relief on. Depending on the way you access your pension savings, this allowance can reduce from the annual allowance of £60,000 down to £10,000.

The MPAA doesn’t apply if you’ve only used some or all of your pension pot to buy a lifetime annuity, take your tax-free lump sum only or if you’re taking all your money out of your pot under the small pots rules. Once your annual allowance is reduced to £10,000, you won’t be able to carry forward any allowances from previous tax years.

Find out more about tax relief after you’ve taken pension money out