Annual Allowance ‘Flexible Benefit’ access

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If you have any benefits in a money purchase (defined contribution) pension arrangement which you have flexibly accessed on or after 6 April 2015 then the Money Purchase Annual Allowance (MPAA) rules may apply.  However, the MPAA will only apply if your total contributions to a money purchase arrangement in a Pension Input Period exceed the MPAA. 
Generally, if you have flexibly accessed any benefits in a money purchase arrangement on or after 6 April 2015, any further contributions you make to a money purchase scheme in subsequent tax years will be tested against the MPAA.  If your contributions exceed the MPAA your defined benefit pension (LGPS) savings will be tested against the alternative AA and you will pay a tax charge in respect of your money purchase saving in excess of the MPAA.
Tax Year
Alternative Annual Allowance
if MPAA is exceeded
2016/2017 £10,000 £30,000
2017/2018 onwards £4,000 £36,000
Special transitional rules applied for the tax year 2015/16 – contact us for more information, if applicable.
Flexible access means taking a cash amount over the tax-free lump sum from a flexi-access drawdown account, taking an uncrystallised funds pension lump sum (UFPLS),  purchasing a flexible annuity, taking a scheme pension from a defined contribution scheme with fewer than 12 pensioner members or taking a stand-alone lump sum if you have primary but not enhanced protection*.
*A stand-alone lump sum is a lump sum relating to pre 6 April 2006 where the whole amount can be taken as a lump sum without a connected pension.