Individual Protection 2016 - Online Applications Open
The Lifetime Allowance for pensions reduced from £1.25 million to £1 million on 6 April 2016. A tax charge applies on benefits taken in excess of the Lifetime Allowance. Doctors whose pensions were worth more than £1 million on 5 April 2016 can apply for protection against a Lifetime Allowance charge on the excess.
Individual Protection 2016 gives you a personal Lifetime Allowance of the value of your pensions as at 5 April 2016, subject to a maximum of £1.25 million. When you come to take pension benefits, a Lifetime Allowance charge will only apply on benefits that exceed your personal Lifetime Allowance rather than the standard Lifetime Allowance (£1 million, increasing in line with inflation from April 2018).
This protection is free and places no restrictions on further contributions or growth in your pensions. This should therefore be a consideration for anyone whose pensions were worth more than £1 million on 5 April 2016, although note you can’t apply if you already hold Primary Protection or Individual Protection 2014* from previous reductions in the Lifetime Allowance.
In order to apply you will need to know what your pension(s) were worth on 5 April 2016, broken down as follows:
Your scheme administrator should be able to provide this information. You will need to include all of your pension schemes if you have more than one.
*On 6 April 2014 the Lifetime Allowance reduced from £1.5 million to £1.25 million. Applications for Individual Protection 2014 are still open (until 5 April 2017). This provides a personalised Lifetime Allowance of the value of your pensions as at 5 April 2014 where this was more than £1.25 million, up to a maximum of £1.5 million, so offers greater protection than Individual Protection 2016 for those doctors whose pensions are valuable enough to apply.
If you require help calculating the value of your pensions as at 5 April 2016 or 5 April 2014 please contact Richard Higgs, Chartered Financial Planner, on 0117 966 5699 or email@example.com. This can also be a useful time to get an overview of your pensions and make sure your finances are on track to support your plans for retirement.
Alternatively, if you are ready to apply for Individual Protection 2016 you can do so online here.