Guidance issued on lifetime allowance protections

HMRC has published guidance on the lifetime allowance protections which are available to individuals who have pension savings worth more than the £1.25m lifetime allowance.

The primary protection gives an enhanced lifetime allowance and so allows higher pension savings without the lifetime allowance charge. Enhanced protection also avoids the lifetime allowance charge, but limits the use of pension savings. The fixed protection secures the lifetime allowance at £1.8m or £1.5m, depending on whether it was applied for by 6 April 2012 or 6 April 2014.

Finally, Individual Protection 2014 applies since 5 April 2014. It gives a protected lifetime allowance equal to the value of pension rights on 5 April 2014, up to an overall maximum of £1.5m. Any pension savings in excess of the protected lifetime allowance will be subject to a lifetime allowance charge.