The Annual Allowance (AA) is the amount of pension savings that benefits from tax relief in any one tax year.
Since April 2016 the Annual Allowance has been ‘tapered’ for individuals whose ‘Threshold’ income and ‘Adjusted’ income is more than certain levels. The reduction in Annual Allowance will be £1 for every £2 that the ‘Adjusted’ income exceeds this level, although individuals will still have a minimum Annual Allowance amount.
~ Tapered to £10,000 for individuals with Threshold income above £200,000 & Adjusted Income above £260,000.
* Tapered to £4,000 for individuals with Threshold income above £200,000 & Adjusted Income above £240,000.
** Tapered to £10,000 for individuals with Threshold income above £110,000 & Adjusted Income above £150,000.
If a client ‘flexibly accesses’ their benefits and take an income, then the Money Purchase Annual Allowance (MPAA) will be triggered.
Annual Allowance history since 2006/07 and Money Purchase Annual Allowance is below;
| TAX YEAR | AA | MPAA |
| 2026/27 | £60,000~ | £10,000 |
| 2025/26 | £60,000~ | £10,000 |
| 2024/25 | £60,000~ | £10,000 |
| 2023/24 | £60,000~ | £10,000 |
| 2022/23 | £40,000* | £4,000 |
| 2021/22 | £40,000* | £4,000 |
| 2020/21 | £40,000* | £4,000 |
| 2019/20 | £40,000** | £4,000 |
| 2018/19 | £40,000** | £4,000 |
| 2017/18 | £40,000** | £4,000 |
| 2016/17 | £40,000** | £10,000 |
| 2015/16 | £40,000 | £10,000 |
| 2014/15 | £40,000 | |
| 2013/14 | £50,000 | |
| 2012/13 | £50,000 | |
| 2011/12 | £50,000 | |
| 2010/11 | £255,000 | |
| 2009/10 | £245,000 | |
| 2008/09 | £235,000 | |
| 2007/08 | £225,000 | |
| 2006/07 | £215,000 |