Protection and enhancement factors

LTA protections

This section contains limited information about LTA protections as this information is covered in PTM176000 and PTM174000.

Each time the LTA was reduced, members were able to apply to HMRC for LTA protection. Although the LTA is abolished from 6 April 2024, these protections may still be of use as they may entitle members to an increased LSA and LSDBA based on their protected LTA.

A valid LTA protection does not allow members to take a PCLS of more than 25 per cent of the capital value of the benefits they are crystallising.

Primary Protection, Enhanced Protection, Fixed Protection 2012, Fixed Protection 2014, Individual Protection 2014, Fixed Protection 2016 and Individual Protection 2016 are closed for new applications. However, if a member has benefits in a public service pension scheme affected by the McCloud remedy, they can still apply to HMRC for Fixed or Individual Protection 2016. The deadline for applying is 5 April 2027.

Members who plan to rely on their LTA protections at an RBCE are responsible for providing you with their HMRC protection number. As best practice, you should check if a member at risk of exceeding the LSA and / or LSDBA, has any LTA protections. You must validate the member’s LTA protection by either obtaining a copy of the protection certificate or by using the scheme administrator lookup service before adjusting the LSA and LSDBA.

Employers can apply an automatic enrolment exception, where they have reasonable grounds to believe the worker has an LTA protection. This was introduced because new pension build up could cause some types of LTA protection to be lost.

LTA enhancement factors

LTA enhancement factors give individuals a higher lifetime allowance by working as a multiplier of the standard lifetime allowance. Members might obtain an enhancement factor where an overseas transfer is received into a registered pension scheme in the UK, or a pension credit is applied. See archived PTM095500 and PTM175100 for more information. LTA enhancement factors increase a member’s available LSA and / or LSDBA. A member can hold LTA protections and LTA enhancement factors. The member can also hold more than one enhancement factor.

Example 1: Fixed protection 2012

The member’s LTA was fixed at £1,800,000 – Fixed Protection 2012 was introduced in 2012 when the standard LTA reduced from £1.8 million to £1.5 million.

At the RBCE, the standard LSA and LSDBA is adjusted.

The member’s available LSA is £450,000 as calculated as £1,800,000 × 0.25 = £450,000

The member’s available LSDBA is £1,800,000 – this is simply the value of the protected LTA.