Defined Contribution  

Over-55s unaware of money purchase annual allowance

The government introduced the MPAA to stop people recycling pension tax relief. However, as FTAdviser reported yesterday (30 March), the government had no evidence that this practice was actually taking place.

Richard Parkin, head of pensions policy at Fidelity International, said the government's decision to push ahead with the policy was "galling".

"Given the industry is united in its opposition to the change, and is willing to put forward alternatives, it's really disappointing that they've ignored us.

"It's particularly frustrating that they don't have any evidence of the loophole being used," he said.

He said the new rule would have the greatest impact on people on medium incomes with a good workplace pension, who inadvertently drawdown on another pension, unaware that this will trigger the MPAA.