Pension Annual Allowance (AA)
The pensions annual allowance is the maximum amount that both you and your employer can pay into a pension fund each year. This is capped with effect from 6 April 2023 at £60,000 pa or your earnings.
Flexible Drawdown for pension funds over £10,000
The increase in MPAA is designed to get more people to stay in work rather than retire and/or to return to work even if they have accessed some of the taxable element of any investment linked pension pot for early retirement or perhaps to get through the current inflation and cost of living increases.
Plan Pension Fund Withdrawals
Given the above, it is worth considering what your work position is, whether you are likely to need to pay more than £10,000 pa into a pension in the future before drawing down any taxable element of your investment linked pensions. Depending upon the route that you take or the size of the funds that you have, this may affect how and when you decide to draw down pension funds.
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