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MPAA - Have I understood this?
Sea_Shell
Posts: 10,283 Forumite
Quick question...
I understand that MPAA is triggered if any taxable income is taken from a pension fund. (outside any small pots rule)
Once triggered, you're then restricted to only making new contributions of £4000 gross in any tax year.
A non-earner, with no taxable earnings is restricted to only £3600 gross.
So, is someone in draw-down, taking taxable income from a pension (albeit within their personal allowances), able to contribute the full £4000, rather than £3600?
I understand that MPAA is triggered if any taxable income is taken from a pension fund. (outside any small pots rule)
Once triggered, you're then restricted to only making new contributions of £4000 gross in any tax year.
A non-earner, with no taxable earnings is restricted to only £3600 gross.
So, is someone in draw-down, taking taxable income from a pension (albeit within their personal allowances), able to contribute the full £4000, rather than £3600?
How's it going, AKA, Nutwatch? - 12 month spends to date = 3.24% of current retirement "pot" (as at end December 2025)
0
Comments
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Pension income is not "relevant income" so the £3600 limit applies.
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You would need to be actually earning a minimum of £4,000 pa to do that.1
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Ok, Thanks.
Why can't they just have the same limit for both 🤦🏼♀️How's it going, AKA, Nutwatch? - 12 month spends to date = 3.24% of current retirement "pot" (as at end December 2025)0 -
Why can't they just have the same limit for both 🤦🏼♀️Many have said that but you know it would go to £3600 for both if they did that.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
Well, the budget is just around the corner 😉dunstonh said:Why can't they just have the same limit for both 🤦🏼♀️Many have said that but you know it would go to £3600 for both if they did that.
How's it going, AKA, Nutwatch? - 12 month spends to date = 3.24% of current retirement "pot" (as at end December 2025)0
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