The money purchase annual allowance is the £10,000 a tax year that can go into defined contribution pensions tax-charge free after flexible access.
Plenty of people start drawing on a pension and carry on paying into one. The catch is that some withdrawals cut the defined contribution saving you can make without a tax charge from the ordinary £60,000 for 2026/27 to £10,000, the MPAA. Here is what sets that off, what does not, how it is tested and what you must tell your schemes.
Pension Wise, from MoneyHelper, is free, impartial and backed by government, and explains how to take money from a defined contribution pension (what Pension Wise is). If you want your own payments, an employer's and any lump sums measured against the limit, an FCA-authorised adviser can tally them in a free call; ask for one with the form on this page.
The £10,000 limit, and how it got there
GOV.UK explains that flexibly accessing a pension can reduce your annual allowance, and names the reduced figure the "money purchase annual allowance". HMRC's published rates give the ordinary allowance as £60,000 and the MPAA as £10,000, both for 2026 to 2027. The MPAA was introduced on 6 April 2015; from 2016 to 2017 the figures have been:
| Tax year | Money purchase annual allowance |
|---|---|
| 2016 to 2017 | £10,000 |
| 2017 to 2018 up to and including 2022 to 2023 | £4,000 |
| 2023 to 2024 onwards (2026 to 2027 included) | £10,000 |
The current £10,000 comes from section 21 of the Finance (No. 2) Act 2023 (Royal Assent 11 July 2023), which replaced £4,000 with £10,000 in sections 227ZA(1)(b) and 227B of the Finance Act 2004, with effect for 2023-24 and later tax years.
The MPAA sits alongside the ordinary allowance: HMRC's Pensions Tax Manual (PTM056510) says that where it is not exceeded in a tax year, a person will "retain the annual allowance for all their pension savings". The ordinary allowance is explained in the pension annual allowance guide.
Which withdrawals count as flexibly accessing a pension
HMRC's manual (PTM056520) lists the trigger events. The earliest one to happen to you marks your first flexible access, and the test applies in that tax year and every later one:
| Trigger | Conditions | When it takes effect |
|---|---|---|
| Flexi-access drawdown fund | Money designated on or after 6 April 2015, or an older fund redesignated on transfer to another scheme; first payment of income withdrawal or of a short-term annuity bought from the fund. | Immediately before that first payment |
| Older capped drawdown fund that converts | It converts because a payment exceeds the capped drawdown limit or because you ask the scheme to convert it, and you had made no valid flexible drawdown declaration before 6 April 2015. | Immediately before the first payment from the converted fund |
| Flexible drawdown declaration | A scheme accepted a valid declaration before 6 April 2015 that you met the flexible drawdown conditions. | The start of 6 April 2015; no payment is needed |
| Uncrystallised funds pension lump sum (UFPLS) | The first one paid to you. | Immediately before that payment |
| Stand-alone lump sum | You have primary protection and a protected tax-free lump sum right above £375,000; not under a defined benefits arrangement. | Immediately before that payment |
| Lifetime annuity that can fall | Entitled from 6 April 2015 onwards, under terms that let payments fall, actually or possibly, outside the prescribed exceptions. | Immediately before the first annuity payment |
| Scheme pension from a small scheme | A money purchase scheme pension (not a collective one), entitlement on or after 6 April 2015, with fewer than 11 other people entitled to a scheme pension or dependants' scheme pension in the scheme, and not paid under an annuity contract treated as a registered pension scheme. | Immediately before the first payment |
The manual adds that a payment of any of these kinds from an overseas pension scheme that has had UK tax relief is also a trigger. Nor does a payment from a drawdown fund made up wholly of a "disqualifying pension credit": rights received on divorce from a partner whose pension was already being paid when it was split (pensions on divorce).
A lifetime annuity is not automatically outside the rule: it turns on whether the contract lets payments fall, so ask the provider (annuities). The routes are compared in drawdown compared with UFPLS, with older funds in flexi-access versus capped drawdown and the payment itself in the UFPLS guide.
What does not set it off
A separate page of the manual (PTM056530) says the MPAA "will not apply" on:
- a pension commencement lump sum (the usual tax-free cash);
- a trivial commutation lump sum;
- a "small lump sum" paid from a money purchase arrangement;
- a scheme pension from a money purchase arrangement where at least 11 other people are receiving a scheme pension or dependants' scheme pension;
- a lifetime annuity that cannot decrease in amount except in prescribed circumstances;
- payments from a pre-6 April 2015 drawdown pension fund that stay within the permitted maximum for capped drawdown; and
- payments from a beneficiary's flexi-access drawdown fund (an inherited pension).
The route can matter more than the amount: in HMRC's example, a small pot paid as a small lump sum is not a trigger, but the same pot paid as a UFPLS is. The conditions are in the small pot rules guide, and tax-free cash in the tax-free lump sum guide.
Defined benefit pensions
Section 227G(9) of the Finance Act 2004 makes a scheme pension a trigger only when it is paid under a "relevant arrangement", which section 227G(9A) defines as a money purchase arrangement that is not a collective one. A scheme pension from a defined benefit arrangement is therefore not that trigger; if a final salary scheme pays you anything else, ask the scheme how it is treated. Defined benefit saving still counts against the alternative allowance below (defined benefit input amounts; final salary pensions).
How the limit is tested once it applies
GOV.UK's guidance on checking the MPAA says you have gone above it if more than £10,000 has gone into all your defined contribution pensions, counted from the day after you first flexibly accessed to the end of that tax year, and over the whole tax year in later years. Four points follow from that guidance and HMRC's manual.
- Everything paid in counts, whoever pays it. The measure is the total paid in during the tax year, including tax relief and employer contributions, so an employer's money uses up the £10,000 exactly as yours does (salary sacrifice and the allowance).
- The first year is apportioned. In the year you first flexibly access, only contributions after the trigger are tested; for an ordinary money purchase arrangement PTM056540 splits the year by "the contributions paid during each period".
- Other pensions get an alternative allowance. If the £10,000 is exceeded, the alternative annual allowance covers defined benefit saving and defined contribution saving made before you flexibly accessed. HMRC's rates give it as £50,000 for 2026 to 2027; GOV.UK adds that it may differ if adjusted income is over £260,000 (the taper guide). The amount over £10,000, plus anything over the alternative allowance, is compared with the amount over the ordinary allowance, and tax falls on the greater of the two.
- No carry forward for the MPAA. Allowance left over from earlier tax years cannot reduce the amount you have gone above the MPAA, and an unused MPAA cannot itself be carried forward. Carried-forward allowance can still be added to the alternative allowance (the carry forward guide).
Going over the limit does not stop you paying in. It produces an annual allowance charge, declared on a Self Assessment tax return, which either you or the pension provider must pay (the tax charge guide; relief is in pension tax relief).
A worked year: first lump sum on 1 September 2026
Our own arithmetic, not an HMRC example: someone with defined contribution pots only and adjusted income below £260,000 takes a first UFPLS on 1 September 2026, the trigger falling immediately before payment. £1,800 a month, tax relief and employer money included, goes in on the 20th.
| Payments in 2026/27 | Number | Total | Tested against the £10,000? |
|---|---|---|---|
| 20 April to 20 August 2026, before the trigger | 5 x £1,800 | £9,000 | No (counted against the alternative allowance of £50,000) |
| 20 September 2026 to 20 March 2027, after the trigger | 7 x £1,800 | £12,600 | Yes |
The £12,600 is £2,600 over £10,000, so the alternative chargeable amount is £2,600. The ordinary test gives nothing, as £21,600 is under £60,000, so the charge falls on the greater figure, £2,600, though total saving is far inside the ordinary allowance. In a later full year the same payments, £21,600, would all be tested against £10,000.
At £800 a month after the trigger, the totals would be £5,600 in 2026/27 and £9,600 in a full later year, both under £10,000. The test is on the total across every defined contribution pot, not each pot alone.
The flexible access statement and the 91-day notice
Two duties follow a trigger. Under regulation 14ZA of the Registered Pension Schemes (Provision of Information) Regulations 2006, the scheme administrator must give you a statement within 31 days beginning with the date of the event, stating that date and explaining the £10,000 limit and your own duties. GOV.UK calls it a flexible access statement and gives an overseas pension 91 days. None is needed if the administrator issued one for an earlier event or has been told, by you or another scheme, that you flexibly accessed earlier.
Your duty is in regulation 14ZB. It applies if you are an accruing member of a registered pension scheme: money purchase contributions are being paid by you, for you or by your employer, or you are an active member through a cash balance or hybrid arrangement. You must then, within 91 days, pass a copy of the statement, or notice of it and of the event date, to the administrator of each other scheme you are accruing in. The 91 days start on the day you receive the statement if you were accruing at any point since the event, and otherwise on the first day after receipt that you are. A scheme where you start accruing later has its own 91 days from that day, unless you joined it by a recognised transfer after the event, and no scheme needs telling twice.
Keep the statement: it carries the date every later test depends on. On restarting workplace saving, see auto-enrolment after State Pension age and taking a pension while still working. Several schemes in play? Naming each one when you fill in our enquiry form lets the adviser who rings go through every statement, date and contribution in one conversation.
Questions about paying in after flexible access
Can I carry on paying into a pension after starting drawdown?
Yes. If a trigger has occurred, defined contribution saving above £10,000 a tax year, across all your pensions, is charged as set out above. Whether a scheme accepts new contributions is for that scheme to say.
Does taking only the tax-free lump sum trigger it?
A pension commencement lump sum alone does not. Taking cash as a UFPLS, tax-free part included, does, because the UFPLS is itself a trigger.
Does buying an annuity trigger it?
It depends on the product. A lifetime annuity that can only fall in prescribed circumstances does not; one whose terms allow decreases, entitled to on or after 6 April 2015, does. So does a short-term annuity paid from a flexi-access drawdown fund, if it is the fund's first payment.
Your next step
Pension Wise is the free place to start on how to take the money. Whether a withdrawal is still ahead or already taken, an FCA-authorised adviser can tally your contributions and trigger dates against the £10,000 test in a free call, requested by noting the MPAA in the form on this page. The FCA's guide to pension scams is worth reading before sharing details with any firm. Wider tax questions start at pension tax, and ways of drawing money at pension drawdown.
Sources
Pages read on 20 October 2026.
- GOV.UK, Annual allowance
- GOV.UK, Check if you’ve gone above the money purchase annual allowance
- HMRC, Pension schemes rates
- HMRC Pensions Tax Manual: PTM056510, PTM056520, PTM056530, PTM056540, PTM063230
- Finance Act 2004: section 227G, section 227ZA; Finance (No. 2) Act 2023, section 21
- Registered Pension Schemes (Provision of Information) Regulations 2006: regulation 14ZA, regulation 14ZB
- MoneyHelper, Pension Wise, read through an archive snapshot of 28 September 2026