← Calculators/Tax year 2026/27·Last reviewed
Money purchase annual allowance (MPAA) calculator
The £10,000 cap on money-purchase saving once a pot is flexibly accessed — and the default-versus-alternative chargeable-amount test that decides the charge.
Free, no sign-up. Runs the same engine and versioned tax-year config as the signed-in suite — the pension and bond calculation workbench UK paraplanners use to produce compliance-annex PDFs. Your calculator figures stay in this browser unless you choose to share or rerun them in the signed-in workbench. How we verify the numbers.
— In short
The money purchase annual allowance (MPAA) is a £10,000 cap on the contributions you can make to money-purchase (defined-contribution) pensions each tax year once you have flexibly accessed a pot. It replaces the standard allowance on the DC side, carries no carry-forward, and persists once triggered — but defined-benefit accrual is unaffected.
ParaplanAI calculator illustration
MPAA
Tax year 2026/27 · Last reviewed 20 Jul 2026
This year, income, and the three prior years.
Versioned config per year — AA, taper threshold and MPAA all move.
The annual-allowance charge is levied at the member's marginal rate on non-savings income, so a Scottish taxpayer is charged on the Scottish bands (PTM056110).
Flexible access (e.g. UFPLS, flexi-access income) triggers the MPAA.
All money-purchase inputs: member + employer + tax relief.
Employer contributions (incl. salary sacrifice) count toward the AA but are NOT capped by your relevant earnings.
From the DB PIA calculation (16× method) — not contributions paid.
Caps tax-relievable MEMBER contributions at the greater of 100% of earnings and £3,600 gross. Employer contributions sit outside this cap. Pension, property, savings and dividend income are not relevant UK earnings.
Net income LESS the gross of the member's relief-at-source contributions (net-pay and salary-sacrifice ones are already out of net income — don't deduct twice), PLUS any pay given up under a salary sacrifice made on or after 9 July 2015. At or below the gate → no taper, whatever the adjusted income.
Net income plus all pension input (incl. employer). Drives the £1-for-£2 taper.
Pension input in the three prior years
Oldest year — consumed first.
Enter the pension input (all contributions) for each prior year — the tool derives the unused allowance as that year’s annual allowance minus the input, so a membership year with no contributions carries the full allowance forward (PTM055100). Untick “scheme member” for any year the client held no registered-scheme membership — that year is excluded from carry-forward. Prior-year taper isn’t applied here; the full pension workbench (free account) derives it from the contribution and income history.
For planning and illustration purposes only. Verify all inputs against source documents. This tool does not constitute financial or tax advice.
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— How it's calculated
The £10,000 cap on DC saving
Once a member flexibly accesses a money-purchase pot the money purchase annual allowance applies. From the trigger date, money-purchase contributions are capped at £10,000 a year (it was £4,000 before 2023/24). Defined-benefit accrual is unaffected, and the cap persists once triggered. Taking only a tax-free lump sum does not trigger it, and neither does capped drawdown income kept within the GAD cap.
What actually counts as flexible access
The trigger list is longer than the two events most summaries name. Any of these fires it: an uncrystallised funds pension lump sum (UFPLS); income taken from flexi-access drawdown; exceeding the GAD cap on a pre-2015 capped drawdown arrangement (income within the cap does not); payments from a flexible annuity; a stand-alone lump sum paid to a member with primary protection and protected tax-free cash above £375,000; and having been in the pre-2015 flexible drawdown regime. What does not fire it: a pension commencement lump sum on its own, designating funds to flexi-access drawdown without drawing income, a scheme pension, a lifetime annuity without flexible features, and a small-pot lump sum. Classify the event before setting the flag — the tool caps whatever you tell it is triggered.
PTM056520 (trigger events) · PTM062710 · FA 2004 s.227G
In the trigger year, only post-trigger contributions are capped
The MPAA bites from the trigger date, not from 6 April. In the year flexible access first happens, money-purchase input paid beforethe trigger is tested against the ordinary annual allowance; only input paid on or after it is tested against the £10,000 cap. This quick tool has no trigger-date field, so it treats the whole year's money-purchase figure as post-trigger. That is a caveat, not a safe default, and it cuts both ways for a member who front-loaded contributions earlier in the year: it overstates the alternative chargeable amount, and — through the s.228A(8) substitution — it can also overstate the unused allowance carried forward out of that year. Split the figure at the trigger date, or run the case in the full pension workbench, before relying on a trigger-year result.
PTM056520 (trigger-year apportionment) · FA 2004 s.227B(2)
Two chargeable amounts — the greater applies
HMRC computes the charge two ways and takes the larger. The default chargeable amount tests total input (DC + DB) against the full annual allowance plus carry-forward, exactly as for any member. The alternative chargeable amount tests the DC input over the £10,000 cap, plus any DB input over the alternative annual allowance — the standard allowance minus the MPAA, so £50,000. The alternative amount exists to catch DC saving over the cap even when total input would otherwise clear the allowance. The tool runs the same engine as the signed-in product, so both legs are priced, not approximated.
PTM056510 (default / alternative chargeable amount)
Carry-forward survives, but cannot lift the cap
Carry-forward is never set against the MPAA itself. It survives an MPAA year and stays available for the default test and the DB-side alternative allowance — but the DC input over £10,000 is chargeable regardless of how much unused allowance exists. There is no carrying forward of an unused MPAA either: an unused £10,000 does not roll into next year.
— How to calculate the money purchase annual allowance charge
Step 1
Confirm the MPAA is triggered
Check the event against the statutory trigger list: a UFPLS, flexi-access drawdown income, exceeding the GAD cap on capped drawdown, a flexible annuity, a stand-alone lump sum under primary protection with protected cash above £375,000, or pre-2015 flexible drawdown. A tax-free lump sum alone, a designation without income, or capped drawdown within the cap does not trigger it.
Step 2
Cap the DC input from the trigger date
Cap money-purchase contributions at the £10,000 MPAA (£4,000 before 2023/24). In the trigger year only input paid on or after the trigger date is tested against the cap; earlier input is tested against the ordinary allowance. Defined-benefit pension input is unaffected.
Step 3
Compute the default chargeable amount
Test total pension input (DC + DB) against the full annual allowance plus carry-forward, as for any member.
Step 4
Compute the alternative chargeable amount
Add the DC input over the £10,000 cap to any defined-benefit input over the £50,000 alternative annual allowance.
Step 5
Charge the greater
The chargeable amount is the greater of the default and alternative figures, taxed at the member’s marginal rate as the annual allowance charge.
— Worked example
- Money purchase annual allowance — the DC cap
- £10,000
- Applicable annual allowance (no taper at this income)
- £60,000
- Chargeable amount (greater of the default / alternative test)
- £5,000
- Estimated annual allowance charge (marginal rate)
- £2,000
Computed live by the same engine the tool above runs. The £15,000 of DC input is capped to the £10,000 MPAA; the £5,000 over the cap is the alternative chargeable amount — caught even though total input (£35,000) sits under the £60,000 allowance. The default test alone returns nothing here. This is a trigger year, so the whole £15,000 is taken as post-trigger input: where a member paid money-purchase contributions before the trigger date, that part is tested against the ordinary allowance instead (PTM056520).
— Frequently asked questions
What triggers the money purchase annual allowance?
Flexibly accessing a money-purchase pot. The statutory list covers an uncrystallised funds pension lump sum (UFPLS), income taken from flexi-access drawdown, exceeding the GAD cap on a pre-2015 capped drawdown arrangement, payments from a flexible annuity, a stand-alone lump sum paid under primary protection with protected tax-free cash above £375,000, and pre-2015 flexible drawdown. Taking only a pension commencement lump sum does not trigger it, nor does designating funds to flexi-access drawdown without drawing income, a scheme pension, or capped drawdown income kept within the cap.
Does the MPAA apply to the whole of the tax year it is triggered in?
No. It applies from the trigger date. Money-purchase input paid earlier in that tax year is tested against the ordinary annual allowance; only input paid on or after the trigger date is tested against the £10,000 cap (PTM056520). The quick tool above has no trigger-date field, so it treats a trigger-year money-purchase figure as entirely post-trigger — split the figure at the trigger date before relying on a trigger-year result.
How much is the MPAA?
It is £10,000 a year (it was £4,000 before 2023/24). The cap applies to money-purchase contributions only; defined-benefit accrual is tested against the alternative annual allowance instead.
Does the MPAA wipe out carry-forward?
No. Carry-forward survives an MPAA year — it simply can never be added to the £10,000 MPAA itself. It remains available for the default chargeable-amount test and for the defined-benefit alternative allowance. Money-purchase input over the cap is chargeable regardless of how much unused allowance exists.
What is the default versus alternative chargeable amount?
HMRC computes the charge two ways and takes the greater. The default tests total input (DC + DB) against the full annual allowance plus carry-forward. The alternative tests the DC input over the £10,000 cap, plus any DB input over the £50,000 alternative annual allowance — it exists to catch DC saving over the cap even when total input would otherwise fit.
Does the MPAA stop applying after the year it is triggered?
No. Once triggered it persists for future tax years. There is also no carry-forward of an unused MPAA — an unused £10,000 does not roll into the next year.
— Related
- Pension annual allowance: the complete guide
- Pension annual allowance calculator — standard AA, taper and carry-forward in one screen
- Tapered annual allowance calculator — the high-earner taper
- The MPAA explained — what triggers it and what it does to carry-forward
- UFPLS calculator — the withdrawal that triggers the MPAA
- Full pension calculator — contribution history, extraction, the compliance PDF (free account)
- How every figure is verified against the HMRC corpus
— When you're ready
Put this calculation in the client file.
ParaplanAI is the paraplanner's calculation workbench: the same engine as this free tool, plus document extraction, full multi-event workflows, and a branded compliance annex PDF with the step-by-step working and its HMRC references — the file a compliance officer signs.