Glossary · UK
What is Individual Protection?
A form of HMRC pension protection based on the value of an individual's pension savings at a past date, which -- unlike fixed protection -- still allows further pension contributions to be made.
Full Definition
Individual Protection is a type of HMRC pension protection (Individual Protection 2014 and 2016 were the main versions) available to people whose total pension savings already exceeded the standard Lifetime Allowance at the relevant date, giving them a personal protected amount based on the actual value of their pension savings on that date, capped at a maximum figure set by HMRC. The central difference from fixed protection is that individual protection does not require the person to stop contributing to, or accruing further benefits in, a pension scheme -- contributions can continue as normal, though any further growth above the protected amount will not itself be protected and will be tested against the standard rules that now apply following the abolition of the Lifetime Allowance in April 2024. Since that date, individual protection continues in an adapted form to set a personalised, higher lump sum allowance for the individual rather than the standard £268,275 figure. Because individual and fixed protection can sometimes be held together (an individual can hold one form of fixed protection alongside individual protection, though not two versions of the same type), anyone with substantial pension savings accumulated before the relevant cut-off dates should check with a financial adviser which combination, if any, still applies to them and what documentation HMRC requires to evidence it.