Fixed Protection 2014 allows individuals at, or near, the pensions lifetime allowance of £1.25m to avoid, at least in part, a recovery charge on pension assets valued over £1.25m at any of a number of ‘crystallisation events’. From 6th April 2014 the lifetime allowance, which is normally the most tax efficient sum which can be built up inside a pension, will fall from £1.5m to £1.25m (a factor of 20x is used to convert annual pension amounts into an notional lump sum value).

HMRC today launched an online tool, and application form (APSS228) for Fixed Protection 2014, though it should be noted that auto-enrolment into a Workplace Pension can ‘break’ Fixed Protection 2014 if an individual does not opt-out within the prescribed (1 month) window.

Fixed Protection 2014 is just one of the means to retain a lifetime allowance of over the new £1.25m limit. The other, will not be available until after 6th April 2014, and whilst not necessarily mutually exclusive may be more or less appropriate than Fixed Protection 2014. For this reason it may be wise to get advice, and Alistair Cunningham at Wingate Financial Planning, who specialises in ‘at retirement’ advice for senior executives and owner managed business would normally bear the cost of an initial telephone consultation. He is available on 01883 332260.

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