Paying and drawing at the same time 15 March at 3:04PM in Pensions, annuities & retirement planning 5 replies 227 views

Alitree

I already draw a workplace pension every month and also pay into another workplace pension , can i pay more into the new one ? will i pay extra tax and are there limits? 

NoMore

It depends, as always the devil is in the details.

What type of pension are you currently drawing from DB or DC ? If DC how much have you drawn and how as if you have took more than the tax free amount, you have triggered the MPAA. Which I believe has just been raised from 4k p.a. to 10k p.a. by the chancellor from April 23

Alitree

Hi Thanks for responding
What are DB, DC and MPAA 

NoMore

DB - Defined Benefit this is a employer pension where the amount you get is based on your years service and salary and as such is usually a fixed amount each month you get

DC - Defined contribution, this is just a large pot of money, and you can choose how much to withdraw at any time.

MPAA - the money purchase annual allowance, this is triggered if you take taxable income from a DC pension and then limits you to 4k (rising to 10k in April) yearly contributions to other pensions. This is the thing we need to establish if you have triggered in order to answer your original question.

Albermarle

Pension basics | Help with pension basics | MoneyHelper

Alitree

I took a lumpsum of 10k and also take a monthly income from it so guess its DC