Advisers set to 'play it safe' on MPAA uncertainty

MPAA cut removed from Finance Bill

Hannah Godfrey
clock • 2 min read

Advisers are hesitant to recommend clients venture above the £4,000 money purchase annual allowance (MPAA) despite the government's decision to delay its proposed reduction to at least after the General Election.

Advisers described the decision to stick to the £4,000 threshold, as opposed to using a full £10,000 allowance, as a more "sensible approach, to play it safe". The MPAA is the amount that can be paid in one year to a person's money purchase arrangements without a tax charge applying, if they have flexibly accessed their benefits. The government had proposed to cut the MPAA from £10,000 to £4,000 in the Spring Budget but in response to the Prime Minister's snap General Election, removed the relevant clause from the Finance Bill last week. Although financial secretary to the Treasury...

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