How advisers would reform the MPAA

“Taking one type of pension such as a DB or a lifetime annuity doesn’t trigger it but taking income through drawdown does,” she pointed out.

She added: “I would personally like to see it just scrapped or if that isn’t the case then reinstate the £10,000 MPAA, to simplify all the levels we have to deal with.”

Despite understanding the rationale for the government to introduce the allowance, Paul Stocks, financial services director at Dobson & Hodge, agreed with raising it to the previous limit.

He said: “The original MPAA level of £10,000 felt more logical and it also reduces the risk of it being accidentally breached.”

Rachel Vahey, senior technical consultant at AJ Bell, said the MPAA was an “unnecessary complication” and should be scrapped.

She said: “Completely removing this barrier would give them the chance to save as much as they can for a comfortable income in later life.

“We already have two other annual allowances that are there to stop people from paying in excessive contributions – we don’t need the added complexity of three.”

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