Lifetime allowance protection

Over the last few years, the lifetime allowance has been cut several times (it’s been reduced in stages from £1.8m to £1,073,100). 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 ‘transitional protection’. However, some forms of protection options (eg enhanced protection and fixed protection) have meant that you won’t be able to put any more money into your pension pot.

The rules on this are very complicated and you can find out more on the HMRC website. If you have any queries about the lifetime allowance, you should seek advice from a regulated financial adviser.