Lifetime allowance

The total amount of pension saving by an individual within a registered pension scheme (www.practicallaw.com/5-201-6474) that receives favourable tax treatment. The lifetime allowance was introduced by the Finance Act 2004. For the 2014/15 tax year, the standard lifetime allowance is set at £1.25 million. For members with pension rights that accrued before 6 April 2006, transitional protection against a lifetime allowance charge (www.practicallaw.com/8-507-1314) was available in the form of primary protection (www.practicallaw.com/4-204-0648) or enhanced protection (www.practicallaw.com/resource.do?item=:24669314), but members had to register for this before 6 April 2009. The lifetime allowance has been reduced on two occasions in recent years. If a member had registered for neither primary nor enhanced protection, he could claim fixed protection (www.practicallaw.com/6-507-1857) before 6 April 2012, or fixed protection 2014 (www.practicallaw.com/3-537-0805) before 6 April 2014. A further form of personalised protection, known as individual protection 2014 (www.practicallaw.com/2-551-0665), is available if an individual claims it before 6 April 2017.

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