Guidance

Protect your pension lifetime allowance

How to apply for and check protections from the reductions in lifetime allowance.

The current standard lifetime allowance is £1,030,000. Please read the previous rates of standard lifetime allowance.

You may be able to protect your pension savings from the 6 April 2016 reduction of the standard lifetime allowance, when it was reduced to £1 million. There are 2 protections you can apply for.

Protection What it does Can I keep building
up my pensions?
Individual protection 2016 Protects your lifetime allowance to the lower of:

- the value of your pension savings at 5 April 2016
- £1.25 million
Yes. But you must pay tax on money taken from your pension savings that exceed your protected lifetime allowance.
Fixed protection 2016 Fixes your lifetime allowance at £1.25 million. No, except in limited circumstances. If you do, you’ll:

- lose your fixed protection 2016
- pay tax on the value of your pension savings used that exceed the standard lifetime allowance when you take your benefits

Check your existing protection

To check your existing protection, you need a Government Gateway user ID and password. If you do not have one, you can create one when you check.

Apply for individual protection 2016

You can apply if your pension savings were worth more than £1 million at 5 April 2016.

You can still apply if you already have:

  • enhanced protection
  • fixed protection
  • fixed protection 2014
  • fixed protection 2016

Individual protection 2016 will stay dormant until you lose or give up your previous protection - tell HMRC in writing if this happens.

If you applied for protection from the 2016 reduction and received a temporary reference number, you must apply online for a permanent reference number.

You cannot apply if you’ve either:

  • primary protection
  • individual protection 2014

Before you start

To apply for individual protection, you need a Government Gateway user ID and password. If you do not have one, you can create one when you apply.

You’ll also need to know what your pension savings were worth on 5 April 2016 and a breakdown of the amount.

If you do not know this information, you can ask your pension scheme administrator. If you have more than one scheme, add the amounts from each scheme together.

Check if there are any service problems, or times when it will not be available.

Apply for fixed protection 2016

You can apply if:

  • you or your employer have not added to your pension savings since 5 April 2016
  • you opted out of any workplace schemes by 5 April 2016

You can still apply for fixed protection 2016 if you already have individual protection 2014. Fixed protection 2016 will be dormant until you lose your previous protection. You should tell HMRC in writing when you have lost lifetime allowance protection.

You cannot apply if you have:

  • enhanced protection
  • primary protection
  • fixed protection
  • fixed protection 2014

If you applied for protection from the 2016 reduction and received a temporary reference number, you must apply online for a permanent reference number.

Before you start

To apply for fixed protection, you need a Government Gateway user ID and password. If you do not have one, you can create one when you apply.

Check if there are any current service problems, or times when it will not be available.

After you’ve applied

Taking money from your pension scheme

Once you’ve applied for lifetime allowance protection through the online service you’ll receive 2 reference numbers that you’ll need to keep. These are your:

  • protection notification number
  • scheme administrator reference

You’ll need to give these reference numbers to your scheme administrator when you decide to take money from your pension schemes, to show that you have a lifetime allowance protection.

Your protection notification number will be shown as:

  • FP16 followed by 10 digits and 1 letter for fixed protection 2016, for example FP161234567890A
  • IP16 followed by 10 digits and 1 letter for individual protection 2016, for example IP161234567890B

Your scheme administrator reference will be shown as PSA followed by 8 digits and 1 letter.

You can find these reference numbers online, even if you did not apply for lifetime allowance protection online.

Report a change to your pension

Changes in your pension can affect if you can keep your individual protection for 2014 and 2016. You should tell HMRC if:

  • the amount of your pension breakdown changes
  • you need to add or change a pension debit because you receive a discharge notice as a result of a pension sharing order - you must tell us within 60 days of the pension debit

If you’ve protected your pension savings online you’ll be able to amend your protections yourself. For example, if you made mistakes with the values when you applied, or if you have pension debits which affect the amount you’re protected by.

To amend your protections, select the ‘pensions’ option. You’ll need the Government Gateway user ID and password you used when you applied.

If you did not protect your pension savings online, you should tell HMRC in writing about these changes. HMRC will write to you to let you know how it affects your protection.

If you’ve lost protection

If you’ve lost your protection you’ll need to tell HMRC in writing. We’ll need:

  • your full name, address and National Insurance number
  • the exact date that you lost protection
  • the reason why you lost protection (for example benefit accrual, auto enrolment)
  • the type of pension arrangement (defined contribution or defined benefit)
  • your original certificate (if you still have it), these were not issued for IP2016 or FP2016

If you have a paper certificate, you should send this with the information in the bullet list above to us by post.

If you applied for IP2016 or FP2016 and do not have a certificate, this information can be provided by email.

Published 6 April 2016
Last updated 6 April 2018 + show all updates
  1. Rates, allowances and duties have been updated for the tax year 2018 to 2019.
  2. This guidance has been updated with information about lifetime allowance protection reference numbers.
  3. References to the individual protection 2014 (IP2014) have been removed as the deadline for applying for this protection closed on 5 April 2017.
  4. The section on how and when to report a change has been amended.
  5. This guidance has been updated to reflect the new online service for members to protect their lifetime allowance from the 2014 and 2016 reduction.
  6. First published.