The government is planning a new regime to protect individuals who may be affected by the lifetime allowance lowering from £1.5m to £1.25m.
The intention is that unlike Fixed Protection, which requires a member to stop all future pension accrual, an individual will be able to protect a lifetime allowance equal to the greater of their pension benefits at 5th April 2014 (subject to the current Lifetime Allowance of £1.5m) and the new standard lifetime allowance, which will be reduced to £1.25m; whilst still allowing future pension savings.
The announcement of the introduction of Personalised Protection is necessary following the Chancellor’s autumn statement where the lifetime allowance is proposed to fall to £1.25m, down from the current £1.5m, which in turn is less than the lifetime allowance in 2011/12, which was £1.8m.
