Money purchase annual allowance worth £8,500 a year less than in 2015

Just Group calculations show the MPAA should have surpassed £12,000

Holly Roach
clock • 2 min read

The money purchase annual allowance (MPAA) is worth £8,480 a year less in real terms than in 2015 when it was first introduced, analysis by Just Group finds.

The firm said adjusted for rising prices, the MPAA "should have reached £12,480", but was cut and frozen at £4,000, "subjecting thousands more pensions savers each year to onerous rules". The MPAA was £10,000 when it was first introduced eight years ago, and was cut to £4,000 in 2017 where it has remained frozen. Just Group said with inflation "picking up sharply" in recent months, the MPAA in real terms is more than £8,000 less than when it came into force. The firm noted: "More than two million people have taken a flexible payment from a pension since 2015 and thousands still sav...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Joint administrators begin transfer process for Hartley SIPP clients

Joint administrators begin transfer process for Hartley SIPP clients

Comes after the SIPP operator was declared in default by FSCS

Isabel Baxter
clock 05 April 2024 • 1 min read
HNWs not making the most out of increased pension allowance

HNWs not making the most out of increased pension allowance

Only a third have taken advantage of the new £60,000 limit

Isabel Baxter
clock 02 April 2024 • 2 min read
DB pensions industry 'working against' govt finance agenda

DB pensions industry 'working against' govt finance agenda

There is little incentive for schemes not to take risk off the table

Jonathan Stapleton
clock 20 October 2023 • 2 min read