What does the MPAA affect?
The MPAA only affects defined contribution pensions. It does NOT affect defined benefit schemes. DB schemes use pension input amount calculations instead.
What is the MPAA limit for 2025/26?
£10,000 per tax year for defined contribution pensions.
Can DB pension accrual continue normally after MPAA is triggered?
Yes. The MPAA does not restrict defined benefit pension accrual.
What is a Relevant Benefit Crystallisation Event RBCE?
An event where pension benefits are taken that uses part of the lump sum allowance or lump sum and death benefit allowance.
What is the most common RBCE?
Taking tax free cash, also called pension commencement lump sum.
What happens if death benefits are not paid within 2 years?
A special lump sum death benefit tax charge may apply.
How are scheme pension death benefits taxed if death occurs before age 75?
They are tax free.
How are scheme pension death benefits taxed if death occurs after age 75?
They are taxed at the recipient’s marginal income tax rate.
What are the temporary non residence rules before April 2017?
Individuals must remain non UK resident for at least 5 full tax years to avoid UK tax charges.
What are the temporary non residence rules after April 2017?
The period increased to up to 10 years for certain pension transfers.
What is the overseas transfer charge percentage?
25 percent.
When does the overseas transfer charge not apply?
When the member lives in the same country as the QROPS or the transfer is to a qualifying overseas occupational scheme.
How long can HMRC claw back overseas transfer charges?
Up to 5 years after transfer.
What pension increases apply under the PPF for service before 1997?
No increases apply.
What pension increases apply under the PPF for service after 1997?
Increases are capped at 2.5 percent per year.
What is the revaluation rate for PPF benefits before 2009?
Up to 5 percent per year.
What is the revaluation rate for PPF benefits after 2009?
Up to 2.5 percent per year.
What are the minimum auto enrolment contribution percentages based on qualifying earnings?
Total 8 percent minimum contribution.
What happens in normal ill health retirement in a DB scheme?
Pension can be taken early but may be reduced.
What happens in ill health retirement in a DB scheme?
Pension may be paid early and may include projected service.
What is serious ill health retirement?
Where life expectancy is less than 12 months and benefits can be taken as a tax free lump sum if within allowances.
What is annuity protection from a DC scheme?
It pays out the difference between the original fund value and the income already paid before death.
What is pension protection from a DB scheme?
It guarantees a minimum amount is paid, using a factor such as 20 to 1.
What is the starting foundation amount?
It is the state pension amount calculated at April 2016 under old and new systems.
