Individual Protection 2014 (IP 2014)
Individual Protection 2014 (IP 2014)

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Individual Protection 2014 (IP 2014)
  • Who would want to claim IP 2014?
  • Legislative framework for IP 2014
  • How does IP 2014 work?
  • Other aspects of IP 2014
  • Applying for IP 2014
  • Replacement or revocation of certificate
  • Timing issues

Through the Finance Act 2014, the government introduced two lifetime allowance protection regimes to accompany the reduction in the lifetime allowance from £1.5m to £1.25m from 6 April 2014:

  1. the fixed protection 2014 (for information on which, see Practice Note: Fixed protection 2014 (FP 2014)), and

  2. the individual protection 2014 (IP 2014) (for information on which, see Practice Note: Individual Protection 2014 (IP 2014))

Like fixed protection 2014, IP 2014 offers transitional protection to individuals who may have already built up pension savings in the expectation that the standard lifetime allowance would remain at least at its current level of £1.5m. However, IP 2014 also offers individuals greater flexibility in protecting any pension savings they have built up before 6 April 2014 from the lifetime allowance charge.

Who would want to claim IP 2014?

IP 2014 is of particular benefit for individuals who want to continue saving in their pension scheme after 5 April 2014, although they normally have a lower lifetime allowance than with fixed protection 2014 and are subject to a lifetime allowance charge on the additional savings.

IP 2014 may also be beneficial to an individual whose employer normally contributes towards their pension scheme but where, if the individual were to opt out of the pension scheme, they would not be able to receive the value of those employer