Where a client has a need for capital but wishes to continue funding in future then PCLS can be paid with the balance being vested to drawdown. This will not trigger the MPAA until income is taken from the drawdown plan. A designation of pension death benefits for flexi-access drawdown does not trigger the MPAA.

Does defined benefit pension trigger MPAA?

The MPAA only applies to contributions to defined contribution pensions and not defined benefit pension schemes.

What triggers MPAA rules?

The MPAA is triggered when you withdraw income from a defined contribution pension scheme, not including any tax-free lump sums you are entitled to. It is designed to limit the amount you can benefit from tax relief after retirement. If you exceed the MPAA, you may face a tax charge.