In June of this year, HMRC published a consultation paper announcing the introduction of two new types of protection for those affected by the drop in the Lifetime Allowance in April 2014 from £1.5m to £1.25. The two types of protection are Individual Protection 2014 and Fixed Protection 2014 with one of the key differences being that you can continue to make contributions with Individual Protection, whereas they must be stopped if electing for Fixed Protection. The two types are summarised in the table below:
| Individual Protection 2014 | Fixed Protection 2014 | |
| How does it work? | Pension savers can apply for a personal lifetime allowance, up to £1.5m, based on the value of their pensions at 5th April 2014 | Pension savers can apply to have a lifetime allowance of £1.5m, applicable for as long as this is higher than the standard lifetime allowance |
| Who can apply? | Anyone with pension savings worth more than £1.25m at 5th April 2014 who does not hold enhanced or primary protection | Those who already have pensions of more than £1.25m or think they may do when they take their pension. They must not have enhanced or primary protection |
| When can you apply? | Likely from 6th April 2014 | Now |
| When is the deadline? | 5th April 2017 | 5th April 2014 |
| Can the client continue to contribute? | Yes | No |
HMRC have now released a form to apply for Fixed Protection, FP2014, which has been available since 12th August 2013 and can be found here. There will not be any certificates issued from HMRC before November 2013. They have also confirmed that Individual Protection plans are still in the pipeline and it may be worth holding off applying for Fixed Protection (which can be done any time before 5th April 2014) until the full plans for Individual Protection have been outlined. Individual Protection will not be available to be applied for before 6th April 2014.
