Fixed Protection 2012 Print

If an individual expected that their pension savings might be more than £1.5 million (including taking into account past crystallisations) when they came to take their benefits on, or after 6 April 2012, they were able to apply for fixed protection to help reduce or mitigate the lifetime allowance charge. Fixed protection allows individuals to crystallise benefits worth up to £1.8 million without paying the lifetime allowance charge, although the ability to accrue future benefits is limited.

Once an individual has fixed protection there are restrictions on what they will be able to do with their benefits. For example, they would normally need to have stopped building up benefits under every registered pension scheme that they belong to by 5 April 2012. It is important that the individual gives their scheme administrator (or employer) enough notice if they want stop their active membership.

What are the conditions for fixed protection?

To keep fixed protection an individual member:

  • Cannot start a new arrangement under a registered pension scheme other than to accept a transfer of existing pension rights;
  • Cannot have benefit accrual; and
  • Will be subject to restrictions on where and how the individual can transfer benefits.

If the individual breaks one of these conditions then the fixed protection is lost. An individual must tell HMRC if this occurs.

An individual had to apply for fixed protection 2012 by 5 April 2012 to protect the Lifetime Allowance of £1.8m. Applications received after 5 April 2012 were not accepted.

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