Glossary · UK
What is Fixed Protection?
A form of HMRC pension protection that locks in a higher lifetime allowance figure (now the Lump Sum Allowance) from a past date, in exchange for stopping further pension contributions and accrual.
Full Definition
Fixed Protection is a type of HMRC pension protection introduced at various points when the Lifetime Allowance was reduced (Fixed Protection 2012, 2014 and 2016 were the main versions), allowing someone to keep the higher lifetime allowance limit that applied before the relevant cut rather than being subject to the lower figure. Since the Lifetime Allowance was abolished from 6 April 2024 and replaced by the Lump Sum Allowance and Lump Sum and Death Benefit Allowance, fixed protection continues in a modified form, giving the holder a correspondingly higher tax-free lump sum entitlement than the standard £268,275 Lump Sum Allowance. The trade-off for holding fixed protection is strict: the individual must not make any further contributions to a defined contribution pension, must not accrue any further defined benefit pension rights beyond a very limited inflation-linked allowance, and must not join a new pension scheme -- doing so causes the protection to be lost permanently, which can be an expensive mistake if an employer auto-enrols the individual into a new workplace pension without them realising the effect on their protection. Anyone holding fixed protection needs to actively opt out of auto-enrolment and inform any new employer of their protected status.