In April 2016 the Lifetime Allowance for pensions (LTA) is reducing from £1.25 million to £1 million. For those doctors retiring after April 2016 whose pensions might exceed the reduced LTA, two types of protection will be available. These are Individual Protection 2016 (IP 2016) and Fixed Protection 2016 (FP 2016).
If you are a doctor and will be relying on IP 2016 or FP 2016 you will need to apply for the protection before taking your benefits. This is so your benefits can be tested against the higher LTA provided by these protections rather than the £1 million standard LTA. This applies even when the benefits you are taking are worth less than £1 million so when calculating how much of the LTA you have used, the value of your benefits will be expressed as a percentage of the higher protected LTA.
There will be a new online self-service for NHS Pension Scheme members to apply for protection available for use from July 2016. You will receive a reference number once you have successfully applied, rather than a protection certificate. Applications can be made in writing to HMRC between April 2016 and July 2016 if necessary until the online service is available.
To discuss your lifetime allowance planning, please get in touch on email@example.com or telephone 0117 966 5699.