Primary, Enhanced, and Fixed lifetime allowance protections were introduced for benefits earned up to 5 April 2006 in respect of those high earners affected by the introduction of the Lifetime Allowance (LTA) from 6 April 2006.
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
Primary protection
Under HM Revenue and Customs rules, if the value of your pension benefits at 5 April 2006 was more than the 2006/2007 lifetime allowance of £1.5 million and you have registered for primary protection, you have an individual lifetime allowance based on how much your benefits at 5 April 2006 exceeded the value of the 2006/2007 standard lifetime allowance. Your individual lifetime allowance increases at the same rate as the standard lifetime allowance.
Enhanced protection
You could register for enhanced protection
- if the value of your pension benefits at 5 April 2006 exceeded the 2006/2007 lifetime allowance of £1.5 million or
- if you believed they might in the future exceed the standard lifetime allowance or
- if you believed your pension benefits in any one year would increase by more than the annual allowance.
Fixed protection
A further protection, known as fixed protection, was introduced by HMRC when the lifetime allowance reduced from £1.8 million to £1.5 million on 6 April 2012. Your lifetime allowance is fixed at £1.8 million with fixed protection. You had to apply before 6 April 2012 to get fixed protection.
Find information about other protections for the Lifetime allowance in Tax controls and pensions