If you start to take money from your pension savings, the amount that can be contributed to your pension while still getting tax relief on might reduce. This is known as the Money Purchase Annual Allowance or MPAA. For most people, the total amount that can be contributed to their pensions each tax year which they’ll receive tax-relief on is £60,000. This includes any contributions from your employer. You’ll trigger the MPAA if you take cash from your flexi-access drawdown account or take a flexible lump sum, this will reduce the amount you can pay into a defined contribution scheme – like The People’s Pension – to £10,000 a year.
