Enhanced protection
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Enhanced protection

The following Pensions guidance note Produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Enhanced protection
  • The lifetime allowance
  • What is enhanced protection?
  • The application process for enhanced protection
  • Enhanced protection with primary protection
  • Late notification and appeals
  • Amending details
  • The loss of enhanced protection
  • Consequences of loss of enhanced protection
  • Notification to HMRC of loss of enhanced protection
  • more


The lifetime allowance

While there is no limit on the total amount of authorised benefits a registered pension scheme can provide for and in respect of its members, there is a restriction known as the lifetime allowance, which restricts the total amount of tax relieved pension benefits that an individual can accumulate across all registered pension schemes during the course of their lifetime. The value of any authorised benefits paid out in excess of an individual’s lifetime allowance is subject to a tax charge known as the lifetime allowance charge. This applies to all types of registered pension schemes equally. Broadly speaking, defined contribution benefits are generally assessed for lifetime allowance purposes by reference to the value of the relevant individual’s pension savings ‘account’ (commonly known as a pensions pot), while for defined benefit (DB) pension savings, the value of the benefits are determined by reference to the capital value of the annual pension (using a factor of 20).

For most people the standard lifetime allowance applies, which has been changed on a number of occasions since its introduction on 6 April 2006 as follows:

Tax Years Lifetime Allowance