£2880 club and the MPAA

n3ophyte

Quick question if I may?

I opened a SIPP with Vanguard this year with the express purpose of paying in £2880 and withdrawing £3600 after tax relief. I had to use UFPLUS for the withdrawal as it seems Vanguard don’t allow withdrawals using the “small pots rule” to avoid triggering your Money Purchase Annual Allowance (MPAA). Does this mean I can’t contribute more than £4000 a year into any pension scheme for the rest of my life (I’m 58) or does the restriction only last for this financial year?

Dazed_and_C0nfused

n3ophyte said:

Quick question if I may?

I opened a SIPP with Vanguard this year with the express purpose of paying in £2880 and withdrawing £3600 after tax relief. I had to use UFPLUS for the withdrawal as it seems Vanguard don’t allow withdrawals using the “small pots rule” to avoid triggering your Money Purchase Annual Allowance (MPAA). Does this mean I can’t contribute more than £4000 a year into any pension scheme for the rest of my life (I’m 58) or does the restriction only last for this financial year?

It's for ever, not just this tax year.

n3ophyte

Oh well. Even less incentive to go back to work then

Thanks for confirming. I suggest people avoid Vanguard SIPPs if this is likely to be a concern!

Dazed_and_C0nfused

n3ophyte said:

Oh well. Even less incentive to go back to work then

Thanks for confirming. I suggest people avoid Vanguard SIPPs if this is likely to be a concern!

Just find a job with a DB pension, problem solved 😃

n3ophyte

Dazed_and_C0nfused said:

n3ophyte said:

Oh well. Even less incentive to go back to work then

Thanks for confirming. I suggest people avoid Vanguard SIPPs if this is likely to be a concern!

Just find a job with a DB pension, problem solved 😃

Indeed. I just resigned from one and I’m fortunate to now be drawing my USS pension.

Marcon

n3ophyte said:

Quick question if I may?

I opened a SIPP with Vanguard this year with the express purpose of paying in £2880 and withdrawing £3600 after tax relief. I had to use UFPLUS for the withdrawal as it seems Vanguard don’t allow withdrawals using the “small pots rule” to avoid triggering your Money Purchase Annual Allowance (MPAA). Does this mean I can’t contribute more than £4000 a year into any pension scheme for the rest of my life (I’m 58) or does the restriction only last for this financial year?

I appreciate it's too late to help you, but possibly anyone who has a SIPP or other DC plan which doesn't enable them to use the 'small pots' rule could simply transfer their savings to another personal pension arrangement (SIPP, stakeholder or whatever - checking first that 'small pots' is an option) and then access them using the small pots rule.