A look at the various transitional protections that have been available with the introduction of the lifetime allowance back in 2006 (known as A-Day) and the subsequent protections that have followed with reductions to the lifetime allowance. (Fixed and Individual Protection 2016 is covered in a separate tech-bite).
- Primary protection protects those individuals with benefits of £1.5m or more (pre A-Day protection).
- Enhanced protection protects those individuals with benefits up to their full value with no limit (pre A-Day protection).
- Fixed Protection 2012 protects those with benefits up to £1.8m.
- Fixed Protection 2014 protects those with benefits up to £1.5m.
Individual Protection 2014 protects individuals with benefits between £1.25m and £1.5m.
What protections have been available?
Individuals have had the opportunity to apply for various protections, originally with the introduction of the pension simplification regime (a-day) and subsequently with decreases in the lifetime allowance in 2012, 2014 and 2016:
- Various transitional protections have been available in the past which could have protected benefits at higher limits than the current lifetime allowance
- Fixed and Individual Protection 2016 are still available although clients must have met the criteria as of 6 April 2016*
*Please see our tech-bite on Fixed and Individual Protection 2016
This document is based on Canada Life’s understanding of applicable UK tax legislation and current HM Revenue & Custom’s practice, as at April 2019 and could be subject to change in the future. It is provided for professional advisers only. Any recommendations are the adviser’s sole responsibility.