Reduction in the MPAA

The Government announced their intention to reduce the Money Purchase Annual Allowance (MPAA) to £4,000 from April 2017 in the Spring Budget in March 2017. This was delayed by the General Election but has now been granted Royal Assent. 

This means that all members who have flexibly accessed a DC pension (for example by taking the whole amount as a one off lump sum), are subject to a reduced Annual Allowance of £4,000 for all contributions paid since April 2017. This includes contributions paid by the member and their employer.

If you are affected by the MPAA and your contributions are more than £4,000 during the tax year, then you will be liable for a tax charge. You can find more information on the Annual Allowance Charge on the HMRC website, please click here.

If you wish to reduce the amount that you and your employer pay, you need to complete the Contribution Change Form, which can be downloaded and printed from the website, please click here. Once completed the form needs to be passed to your Payroll Department to action.

Please remember that if you have flexibly accessed a DC account and you have not informed us, you are required to do so within 90 days of receiving the certificate from your previous pension provider. 

 

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