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Can I still pay into pensions if I’m in drawdown?

Yes, you can still make pension contributions. You’ll still receive tax relief on personal contributions provided you’re within your contribution limits and you’re under 75.

Pension contributions are normally restricted to a £40,000 annual allowance. This applies to any benefits you’re building up in defined benefit (e.g. final salary) or money purchase (e.g. personal, self-invested) pensions.

Once you take your first taxable income payment from drawdown, the amount you can pay into money purchase (e.g. personal, self-invested) pensions will be limited to £4,000 each tax year. This is called the Money Purchase Annual Allowance. Taking tax-free cash alone won’t have an effect. If you’re already in capped drawdown you won’t be affected either, unless you flexibly access pension benefits later on or elsewhere.

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