Fixed 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 who are affected by this reduction can apply for protection to ‘fix’ their Lifetime Allowance at £1.25 million. There is, however, one crucial point regarding the availability of this protection. In order to apply, all pension contributions must have stopped before 6 April 2016. This means you can only apply for Fixed Protection 2016 if:
Once you have the protection, this will be lost if you make any further contributions or join a workplace pension scheme. It is therefore only suitable for doctors who do not intend to further fund their pensions before retirement.
You also can’t apply if you already hold any of the following protections from previous reductions in the Lifetime Allowance:
To discuss your retirement planning options before applying, including the current value of your pensions for Lifetime Allowances purposes and weighing up the benefits of building up your pensions vs. paying a Lifetime Allowance charge, please contact Richard Higgs, Chartered Financial Planner, on 0117 966 5699 or firstname.lastname@example.org.
Alternatively, if you are ready to apply, you can do so online here.
There is also a second form of protection available – Individual Protection 2016. Please see our related articles to check your eligibility for this protection, which can be taken out as well as or instead of Fixed Protection 2016.