Money purchase annual allowance (MPAA)

This term refers to the reduced annual allowance for contributing to your pensions savings in a defined contribution pension scheme (like The People’s Pension).

For the current tax year, the annual allowance is £4,000 – the MPAA – if you take payments from your pension savings. Either with flexi-access drawdown or a flexible lump sum (described by HMRC as an uncrystallised funds pension lump sums) from your pension pot.