money purchase annual allowance

trickydicky14

Hi a couple of novice questions I would like to ask.

Firstly, am I correct in thinking the ‘money purchase annual allowance’ on pensions has been increased this year to 10K from 4K?

So, being a non-earner and retired I can now contribute up to 10k in to my sipp.

Next question, I have two untouched pensions, if I was to take tax free and taxable money from one of them would the MPAA apply to both pensions from that point onwards or just the one pension?

Thanks for any advice.

Marcon

trickydicky14 said:

Hi a couple of novice questions I would like to ask.

Firstly, am I correct in thinking the ‘money purchase annual allowance’ on pensions has been increased this year to 10K from 4K?

Yes.

So, being a non-earner and retired I can now contribute up to 10k in to my sipp.

No. You can contribute a (gross) maximum of the higher of your earned income, or £3,600 - so in your case, the latter figure.

Next question, I have two untouched pensions, if I was to take tax free and taxable money from one of them would the MPAA apply to both pensions from that point onwards or just the one pension?

The MPAA applies to future contributions, not pensions you've already built up. For clarity, you would only be subject to the MPAA if you took taxable money from a DC pension and 'flexibly access' those funds (ie you don't use the 'pot' to buy an annuity).

Thanks for any advice.

Please see above.