Reducing the pensions money-purchase annual allowance

The government is consulting until 15 February 2017 on reducing the money purchase annual allowance to £4 000 from April 2017. Once a person has accessed pension savings flexibly the tax relief on any further contributions to a defined contribution pension is restricted to a special money purchase annual allowance (currently £10 000). The aim of the change is to limit the extent to which pension savings can be recycled to take advantage of tax relief. The government does not consider that earners aged 55 and over should be able to enjoy double pension tax relief such as relief on recycled pension savings but wishes to continue to offer scope for those who have needed to access their savings to subsequently rebuild them. See http://bit.ly/2glO7lC.