Lifetime allowance protection

Between 2006 and 2024, the lifetime allowance (LTA) limited the amount you could save into your pension scheme(s) and receive full tax benefits.

Prior to the 2023/24 tax year, any amount over the LTA was subject to a tax charge. Between 2012 and 2015, the LTA was cut several times. When it was introduced in 2006 and every time it’s been reduced, the government has allowed savers to ‘protect’ their pension at the level of the previous higher allowance if their pension savings were more than the new lower allowance. You may see this referred to as ‘LTA protection’ in general, or ‘enhanced protection’, ‘fixed protection’, or ‘primary protection’ in relation to specific LTA changes.

From 6 April 2023, the tax charge was removed, and from 6 April 2024 the LTA was abolished and new allowances came into effect. However, individuals can still keep entitlements to a higher allowance if they’ve previously obtained LTA protection. A financial adviser could help you understand your options with this, and you can find out more on our Lump sum allowance page.