Individual and Fixed protection 2016 were introduced from 6 April 2016 in respect of those high earners affected by the Lifetime Allowance (LTA).
The Lifetime Allowance (LTA) is abolished from April 2024. These protections may still be of use. There are 2 tax free allowances in place of the LTA:
- Lump Sum Allowance (LSA)
- Lump Sum and Death Benefit Allowance (LSDBA).
The LSA and LSDBA may be higher based on these protections. Please speak to your tax advisor.
Please be aware that protections can be lost. Please speak to your tax advisor. Find information about losing your lifetime protected allowances on the GOV.UK website
Individual protection 2016 (IP2016)
You can apply for individual protection 2016 from 6 April 2016 if you have pension savings valued at over £1 million (including taking into account past benefits already in payment) on 5 April 2016. However, if you have primary protection or individual protection 2014 you cannot apply for IP2016.
IP2016 gives a protected lifetime allowance equal to the value of your pension rights on 5 April 2016 - up to an overall maximum of £1.25 million. You will not lose IP2016 by making further savings in to your pension scheme but any pension savings in excess of your protected lifetime allowance will be subject to a lifetime allowance charge.
The deadline for new applications for this protection is open until 5 April 2025.
Fixed protection 2016 (FP2016)
You can apply for fixed protection 2016 from 6 April 2016 if you expect your pension savings to be more than £1 million (including taking into account past benefits already in payment) when you come to take them on or after 6 April 2016. FP2016 can be used to help reduce or mitigate the lifetime allowance charge.
With Fixed protection 2016 your lifetime allowance is fixed at £1.25 million rather than the standard lifetime allowance.
You cannot have FP2016 if you already have primary, enhanced, fixed protection 2012 or fixed protection 2014.
The deadline for new applications for this protections is open until 5 April 2025.
Previous protections
Previous protections to the Lifetime Allowance were available for individuals to apply for.
If you hold one of these protections, you must let us know. Certain protections could be lost in some circumstances. Please ensure you check that any protections previously awarded are still valid by visiting the government website GOV.UK