Fund protection summary

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The table below summarises the various fund protection options that have been introduced since 6 April 2006.

  Primary Enhanced Fixed 2012 Fixed 2014 Individual 2014 Fixed 2016 Individual 2016
Availability Only if total pension savings exceeded £1.5m at 5/4/06 Open to anyone at 5/4/06 Open to anyone, except those already with Primary or Enhanced Open to anyone, except those already with Primary, Enhanced or Fixed 2012 Only if total pension savings exceeded £1.25m on 5/4/14, except those already with Primary (on its own or as a back-up to Enhanced) Open to anyone, except those with Primary, Enhanced, Fixed 2012 or Fixed 2014 Only if total pension savings exceeded £1m on 5/4/16, except those already with Primary (on its own or as a back-up to Enhanced) or Individual 2014
Protection Personal lifetime allowance calculated by applying enhancement factor (based on total value of pension savings at 5/4/06) to current SLA (or £1.8m, if greater) Unlimited whilst enhanced protection applies Standard lifetime allowance of £1.8m Standard lifetime allowance of £1.5m Standard lifetime allowance equal to value of total pension savings at 5/4/14, subject to a £1.5m ceiling Standard lifetime allowance of £1.25m Standard lifetime allowance equal to value of total pension savings at 5/4/16, subject to a £1.25m ceiling
Registration Must have registered with HMRC by 5/4/09 Must have registered with HMRC by 5/4/09 Must have registered with HMRC by 5/4/12 Must have registered with HMRC by 5/4/14 Must have registered with HMRC by 5/4/17 There’s no set date to register with HMRC but it’s preferable to do this before benefits are taken There’s no set date to register with HMRC but it’s preferable to do this before benefits are taken
Further pension provision Possible, but may result in lifetime allowance charge Protection lost if contributions are paid after 5 April 2006 (DC) or the value of benefits is more than the ‘appropriate limit’ when benefits are taken (DB) Protection lost if further contributions are paid after 5 April 2012 (DC) or benefits increase in a year by more than the ‘relevant percentage’ (DB) Protection lost if further contributions are paid after 5 April 2014 (DC) or benefits increase in a year by more than the ‘relevant percentage’ (DB)  Possible, but may result in lifetime allowance charge Protection lost if further contributions are paid after 5 April 2016 (DC) or benefits increase in a year by more than the ‘relevant percentage’ (DB)  Possible, but may result in lifetime allowance charge
Lifetime allowance charge Yes, on any excess benefits over the personal lifetime allowance when crystallised No Yes, on any excess benefits over £1.8m (or any higher standard or personal lifetime allowance) when crystallised Yes, on any excess benefits over £1.5m (or any higher standard or personal lifetime allowance) when crystallised Yes, on any excess benefits over the amount protected (or any higher standard or personal lifetime allowance) when crystallised Yes, on any excess benefits over £1.25m (or any higher standard or personal lifetime allowance) when crystallised Yes, on any excess benefits over the amount protected (or any higher standard or personal lifetime allowance) when crystallised
Can it be given up or lost? Only if a pension debit (following divorce) reduces the protected amount below the SLA as at 6/4/06 (£1.5m) Yes Yes Yes Only if a pension debit (following divorce) reduces the protected amount below the SLA as at 6/4/14 (£1.25m) Yes Only if a pension debit (following divorce) reduces the protected amount below the SLA as at 6/4/16 (£1m)
Can it be held as a back-up to another fund protection option? Yes, to Enhanced No No No Yes, to Enhanced, Fixed 2012 or Fixed 2014 Yes, to IP14 (providing the FP16 conditions could still be met at the time IP14 is lost or given up) Yes, to Enhanced, Fixed 2012, Fixed 2014 or Fixed 2016
Maximum PCLS (where there is no protected tax-free cash at 5/4/06) Check if there is a registered tax-free cash amount at 5/4/06 on the HMRC certificate – otherwise lower of 25% of £1.5m or 25% of fund value applies Check if there is a registered tax-free cash percentage at 5/4/06 on the HMRC  certificate – otherwise lower of 25% of £1.5m or 25% of fund value applies Lower of 25% of remaining SLA (£1.8m) and 25% of fund value applies Lower of 25% of remaining SLA (£1.5m) and 25% of fund value applies Lower of 25% of remaining SLA (IP2014 protected amount) and 25% of fund value applies Lower of 25% of remaining SLA (£1.25m) and 25% of fund value applies Lower of 25% of remaining SLA (IP2016 protected amount) and 25% of fund value applies

Key

BCE – benefit crystallisation event. DB – defined benefit. DC – defined contribution. PCLS – pension commencement lump sum. SLA – standard lifetime allowance. 

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