Pension taxation: allowances and their triggers

Pension tax questions are allowance questions, and every allowance has a TRIGGER — learn the trigger with the figure and the distractors collapse. The standard annual allowance is £60,000 of pension input per tax year, and contributions within it attract relief while input above it suffers an annual allowance charge pitched by reference to the member's taxable income (the exam phrase: relief is effectively clawed back at the marginal rate). For high earners the allowance TAPERS, and the taper is the most-tested trap in this topic because it has a two-part trigger: adjusted income must exceed £260,000 AND threshold income must exceed £200,000. Threshold income decides WHETHER the taper applies; adjusted income decides HOW MUCH — £1 of allowance lost for every £2 of adjusted income over the threshold, but never below the £10,000 minimum. A candidate who tapers on one income test alone, tapers £1 for £1, or tapers to nil has reproduced the three standard wrong answers. Separately — different trigger entirely — flexibly accessing money purchase benefits permanently replaces the annual allowance for MONEY PURCHASE contributions with the £10,000 money purchase annual allowance. It equals the taper minimum by coincidence, not by design: the MPAA is triggered by access, the taper by income. Finally the lump sums: the lifetime allowance is gone, but the £268,275 lump sum allowance caps tax-free lump sums in life, inside the £1,073,100 lump sum and death benefit allowance that also counts lump sum death benefits — caps on LUMP SUMS, not on fund value, and transitional protections can raise both.