Glossary · UK
What is Fixed Protection (Lifetime Allowance)?
A form of protection that lets individuals keep a higher, fixed tax-free pension lump sum threshold from when the Lifetime Allowance was reduced or abolished, provided they stop or limit further contributions.
Full Definition
Fixed Protection is a category of pension protection that was introduced each time the Lifetime Allowance was cut (in 2012, 2014 and 2016), letting individuals whose pension savings were already close to or above the new, lower Lifetime Allowance "fix" their allowance at the higher, previous level instead. Although the Lifetime Allowance itself was abolished from 6 April 2024 and replaced with the Lump Sum Allowance and Lump Sum and Death Benefit Allowance, holders of Fixed Protection (2012, 2014 or 2016) retain a correspondingly higher personal Lump Sum Allowance and Lump Sum and Death Benefit Allowance than the standard GBP 268,275 and GBP 1,073,100 figures (2026/27) that apply without protection. The key condition for keeping Fixed Protection has always been that the individual must not have made further "relevant benefit accrual" -- broadly, must not have paid further contributions into a money purchase pension, or built up further benefit in a defined benefit scheme beyond a permitted inflationary limit -- from the date the protection took effect, and breaching this condition causes the protection to be lost permanently. Anyone who holds, or is considering applying for, Fixed Protection needs to weigh the value of the higher tax-free lump sum protection against the cost of forgoing employer pension contributions and their own future tax relief, which is why financial advice is strongly recommended before making contribution decisions that could jeopardise it.