ARTICLE · 12 JANUARY 2012

Reminder! Fixed Protection Deadline Looms

Smith & Williamson

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From 6 April 2012 the lifetime allowance for pension funds will fall from £1.8m to £1.5m. Higher earners have until 5 April 2012 to register for fixed protection of £1.8m.

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Smith & Williamson

From 6 April 2012 the lifetime allowance for pension funds will fall from £1.8m to £1.5m. Higher earners have until 5 April 2012 to register for fixed protection of £1.8m. If the value of pension benefits exceeds the lifetime allowance, a tax charge will be levied at 55% of the excess.

Action points

Look at benefit projections to determine whether you might be affected and then consider ways to deal with it.

Election for fixed protection of £1.8m must be with HMRC by 5 April 2012. No further contributions or membership of a pension scheme will be allowed. From October 2012, a requirement for employers to enrol employees into a pension automatically will be gradually introduced. You must opt out of the pension within one month of enrolment or fixed protection will be lost.

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