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Fixed Protection

Following confirmation in the Finance Act the Lifetime Allowance is due to reduce from £1.8m to £1.5m for any benefit crystallisations after 6th April 2012.

It is however possible to apply for protection to maintain the lifetime allowance at £1.8m and HMRC have now made the application forms available at http://www.hmrc.gov.uk/pensionschemes/apss227.pdf

In order to qualify for Fixed Protection, no further contributions may be paid into a money purchase arrangement and no further relevant benefit accrual must occur in a Defined Benefit arrangement.

  • Fixed Protection can be applied for irrespective of the value of pension savings on 5 April 2012
  • A valuation of current or expected benefits is not required
  • Fixed Protection is not available where Enhanced or Primary Protection applies
  • Fixed Protection will not increase
  • If the standard Lifetime Allowance should ever increase above £1.8m, Fixed Protection will cease
  • Application for Fixed Protection must be received by HMRC by 5 April 2012

 

August 14th, 2011