The Lifetime Allowance was the maximum amount you could save in a pension without paying extra tax. When the government lowered this limit over the years, they introduced protections. This allowed people to lock in their personal higher limit.
The government abolished the Lifetime Allowance on 6 April 2024 replacing it with Lump Sum Allowance (LSA) and the Lump Sum and Death Benefit Allowance.
How does it work with the new Lump Sum Allowance?
The Lifetime Allowance was replaced with the Lump Sum Allowance. This limits the total amount of tax-free cash you can take from all your pensions during your lifetime, for most people it's set at £268,275.
If you hold valid Lifetime Allowance Protection issued by HMRC, you may be entitled to a higher amount of tax-free cash. The amount available depends on the type of protection held and your individual pension history.
💡 Example
If your protected limit is £1.5 million, your personal allowance is £375,000 instead of the standard £268,275.
What types of protection are included?
- Primary protection
- Enhanced protection
- Fixed protection
- Fixed protection 2014
- Individual protection 2014
- Fixed protection 2016
- Individual protection 2016
How to use your protection with us?
We fully support these protections for your SIPP. You just need to send us a copy of your protection certificate from HMRC. Once we verify it, we will update your account with your higher allowance.
📄 Note
Pension rules can be complex. If you need help understanding your allowances, we recommend booking a free Pension Wise appointment through MoneyHelper or speaking to a professional financial advisor.
Will my Fixed Protection 2014 or 2016 apply after I transfer to Trading 212?
Fixed Protection 2014 or Fixed Protection 2016 is linked to your HMRC protection status, not to a particular pension provider.
If you hold valid protection, send us your HMRC protection certificate. Once verified, we will update your account with the applicable protected allowance.