In the March 2017 budget it was announced that the Money Purchase Annual Allowance (MPAA) would be reduced from £10,000 a year to £4,000 a year with effect from 6 April 2017. However this proposal was withdrawn from the Finance Bill in order to expedite its progress through Parliament as a result of the snap general election.
The Finance Bill 2017-19 has now been introduced to implement the reduction of the MPAA from £10,000 to £4,000 and this will have retrospective effect from 6 April 2017. The Finance Bill 2017-19 is currently winding its way through the parliamentary process.
The MPAA was originally introduced in order to restrict the amount of contributions that individuals can pay and consequently receive tax relief on once they have already started to withdraw funds from their pension pot, under the new pension flexibility rules.