THIS PRACTICE NOTE RELATES TO REGISTERED PENSION SCHEMES

Enhanced protection was one of the first two forms of protection made available for pension savers on A-day (6 April 2006) when the registered pension scheme regime and the concept of the Lifetime allowance were first introduced by the Finance Act 2004 (FA 2004). The other form of protection introduced on A-day was primary protection. Unlike primary protection, individuals could claim enhanced protection regardless of the value of their pension rights at 5 April 2006.

The original aim of enhanced protection was to offer transitional protection to individuals who, before A-day, had already built up pension savings that might otherwise have been adversely affected by the introduction of the lifetime allowance (which on A-day was set at £1.5m). While the lifetime allowance was abolished with effect from 6 April 2024, enhanced protection continues to provide some transitional protection in terms of an individual’s entitlement to (i) the lump sum allowance, (ii) the lump sum and death benefit allowance, and (iii) a tax-free lump sum. For further information, see