The lifetime allowance was abolished from 6 April 2024, but the protections people obtained against it still have a job to do. Fixed, individual, enhanced and primary protection now give a higher lump sum allowance than the standard £268,275 and a higher lump sum and death benefit allowance than the standard £1,073,100, so more can be paid tax free. Some fixed and enhanced protections can still be lost.
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What replaced the lifetime allowance?
From 6 April 2024 there is no limit on the total value of pension benefits that can be built up and no lifetime allowance charge. Instead, two allowances limit tax free lump sums (PTM176100 and GOV.UK):
- Lump sum allowance, standard amount £268,275. It covers pension commencement lump sums, the tax free part of uncrystallised funds pension lump sums and stand alone lump sums.
- Lump sum and death benefit allowance, standard amount £1,073,100. It covers those lump sums plus serious ill health lump sums and certain lump sum death benefits.
A lump sum above the available allowance is taxed at the recipient’s marginal rate rather than at a special rate. The lump sum and death benefit allowance also sets the overseas transfer allowance, explained in our guide to QROPS and the overseas transfer charge. For death benefits and inheritance tax, see pensions and inheritance tax.
What does each protection give now?
HMRC’s Pensions Tax Manual sets out the protected allowances for someone with no benefit crystallisation events before 6 April 2024:
| Protection | Lump sum allowance | Lump sum and death benefit allowance |
|---|---|---|
| Fixed protection 2012 | £450,000 | £1,800,000 |
| Fixed protection 2014 | £375,000 | £1,500,000 |
| Fixed protection 2016 | £312,500 | £1,250,000 |
| Individual protection 2014 | Lower of £375,000 and 25% of the protected amount | Lowest of £1,500,000, the protected amount and any enhanced allowance |
| Individual protection 2016 | Lower of £312,500 and 25% of the protected amount | Lowest of £1,250,000, the protected amount and any enhanced allowance |
| Enhanced protection without lump sum protection | £375,000 | Value of uncrystallised pension rights on 5 April 2024 |
Sources are PTM176410 for fixed protection, PTM176510 for individual protection and PTM176310 for enhanced protection. Primary protection, for people with rights worth more than £1.5 million on 5 April 2006, works through the individual’s primary protection factor, which is (value of rights at 5 April 2006 minus £1.5 million) divided by £1.5 million (PTM176210). People with primary or enhanced protection and lump sum rights over £375,000 on 5 April 2006 may also have separate lump sum protection that fixes a higher permitted maximum for their pension commencement lump sum (PTM176320).
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Can fixed or enhanced protection still be lost?
It depends on when the protection was applied for. Fixed protection applied for before 15 March 2023 cannot be lost by building up new benefits, joining new arrangements or transferring (PTM176440). The same applies to enhanced protection certificates issued before that date (PTM176310).
For fixed protection applied for on or after 15 March 2023, and enhanced protection issued on or after that date, the old conditions still bite. Fixed protection is lost if the member:
- has benefit accrual under a registered pension scheme, which for a money purchase arrangement normally means any new contribution
- joins a new arrangement other than in permitted circumstances, such as to receive a permitted transfer
- makes a transfer that is not a permitted transfer, or receives an impermissible transfer
Joining a new arrangement for any other reason loses protection immediately, even if nothing is paid in. Automatic enrolment into a workplace pension is a common trap. A member must tell HMRC within 90 days of losing fixed protection (for FP14 and FP16, within 90 days of when they could reasonably be expected to know), with penalties of up to £300 and daily penalties of up to £60 for failure (PTM176440). Accrual in a defined benefit scheme is tested differently; see annual allowance for defined benefit schemes for how growth in benefits is measured.
Primary protection and individual protection cannot be given up and can only be reduced or lost through a pension debit on divorce (PTM176100). GOV.UK asks members to tell HMRC within 60 days of a pension debit.
Can you still apply for protection?
Generally no. Applications for fixed protection 2016 and individual protection 2016 had to be made before 6 April 2025 (PTM176430 and PTM176530). Earlier protections had much older deadlines, with enhanced and primary protection notified by 5 April 2009. HMRC can accept late notifications only in limited circumstances (PTM176600).
There is a specific route for public service scheme members affected by the public service pensions remedy, often called McCloud. GOV.UK says members of a public service pension scheme between 1 April 2015 and 31 March 2022 may be able to apply for FP16 or IP16 by writing to HMRC Pension Schemes Services. Those who lost enhanced or fixed protection because of the remedy can apply to reinstate it.
How do you use protection when taking benefits?
A scheme administrator must proceed as if the member has no protection unless told otherwise (PTM176410). The member gives the administrator the protection reference number. GOV.UK explains the formats: eight characters for enhanced, primary, FP12, FP14 and some IP14 certificates; IP14, FP16 or IP16 followed by ten digits and a letter for the online protections, alongside a scheme administrator reference starting PSA. HMRC did not issue certificates for FP16 and IP16, only reference numbers, and members can view their protections online. Form APSS203 authorises HMRC to give details directly to the scheme.
How do benefits taken before April 2024 affect the allowances?
Anyone who took benefits before 6 April 2024 starts with a reduced allowance. Under the standard transitional calculation at PTM174100, 25% of the lifetime allowance previously used is deducted from the lump sum allowance. HMRC’s example is someone with £100,000 of lifetime allowance used, whose lump sum allowance falls by £25,000 to £243,275. People with protection use their protected figures in the same way, as set out in PTM174400 to PTM174700.
The standard calculation assumes 25% was taken tax free. Someone who took less, for example from a defined benefit scheme paying a pension with little cash, can apply for a transitional tax free amount certificate based on the lump sums actually received (PTM174300). It must be obtained from a scheme administrator or insurer before the first relevant lump sum after 5 April 2024, and needs complete evidence of all benefits taken.
A worked example
Illustration only. Diane has fixed protection 2016, applied for in 2016, and took no benefits before April 2024. Her lump sum allowance is £312,500 rather than £268,275, so she can take £44,225 more tax free.
- She takes a pension commencement lump sum of £300,000. With FP16 it is all within her allowance.
- Without protection, £31,725 (£300,000 minus £268,275) would be taxed at her marginal rate.
Because her FP16 was applied for before 15 March 2023, she can join her new employer’s pension and contribute without losing it. Had she applied in 2024, joining that scheme would end the protection and she would fall back to the standard allowances.
What mistakes come up most often?
- Assuming protections became irrelevant when the lifetime allowance went, and not quoting them to the scheme.
- Being automatically enrolled into a workplace pension while holding fixed protection applied for on or after 15 March 2023.
- Not telling HMRC about a pension debit on divorce for individual or primary protection.
- Accepting the standard 25% transitional deduction where a certificate would give a larger allowance, and applying too late to get one.
- Recycling the extra tax free cash into new contributions; see the pension recycling rules.
Business owners considering new employer contributions while holding a recent fixed protection should weigh the lost tax free cash against the relief available; see our guide to pension contributions for business owners.
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Related Accountapedia entries
- The lump sum allowance after the lifetime allowance
- Protected tax free cash above 25%
- The lump sum and death benefit allowance
- Uncrystallised funds pension lump sums (UFPLS)
- Serious ill health lump sums
Sources
- GOV.UK: Manual page PTM176100
- GOV.UK: Tax on your private pension
- GOV.UK: Manual page PTM176410
- GOV.UK: Manual page PTM176510
- GOV.UK: Manual page PTM176310
- GOV.UK: Manual page PTM176210
- GOV.UK: Manual page PTM176320
- GOV.UK: Manual page PTM176440
- GOV.UK: Manual page PTM176430
- GOV.UK: Manual page PTM176530
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.