MPAA: Why do we need the money purchase annual allowance?

Current set up creates problems rather than solving them

clock • 3 min read

At present, the MPAA feels like a sledgehammer to crack a nut, writes Lisa Webster...

Earlier this month, 17 industry organisations signed a joint letter to the Treasury calling for the money purchase annual allowance (MPAA) to be increased back to its original level of £10,000. Such widespread support is unusual and shows the depth of feeling across the board. In response a Treasury spokesperson stated: "The money purchase allowance affects around 25% of occupational defined contribution savers aged 55 and over. The cap is designed to stop pensioners — who have already drawn down some or all of their pension — from receiving double tax relief by funding ongoing savings w...

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

Gender pensions gap grows to £113,000

Gender pensions gap grows to £113,000

Report finds more than a third of women are likely to face poverty in retirement

Martin Richmond
clock 18 November 2025 • 3 min read
The FOMO-fuelled run on the pensions bank – where the Treasury is the only winner

The FOMO-fuelled run on the pensions bank – where the Treasury is the only winner

'You can't build a savings culture on a foundation of uncertainty'

Matt Storey
clock 17 November 2025 • 5 min read
Chancellor's potential salary sacrifice plan: A 'high risk gamble built on low quality data'

Chancellor's potential salary sacrifice plan: A 'high risk gamble built on low quality data'

Govt reportedly considering introducing a £2,000 salary sacrifice annual cap

Joseph Warne
clock 14 November 2025 • 4 min read