You can take money out of a UK pension and continue paying into it, but doing so under flexible drawdown or taxable lump sums triggers the Money Purchase Annual Allowance (MPAA), which permanently restricts your future tax-free defined contribution savings limit to £10,000 per year. Furthermore, taking tax-free cash and simultaneously increasing contributions can trigger strict HM Revenue and Customs (HMRC) anti-recycling rules, potentially resulting in heavy tax penalties, making professional financial advice essential before making withdrawals.
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