PTM176510 - Lump sum allowance and lump sum and death benefit allowance: Individual protection: Overview
Source: gov.uk (2025-12-09)


If you are looking for information about IP prior to 6 April 2024, please see the National Archives. (https://webarchive.nationalarchives.gov.uk/ukgwa/20240305022829/https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm090000)

Individual protection 2014 (IP14)

Paragraph 1 Schedule 6 Finance Act 2014 On 5 April 2014, Individuals who had pension savings in excess of £1,250,000 could apply to HMRC for IP14 to protect them from the lifetime allowance charge when those rights come into payment after 5 April 2014. As of 6 April 2024, lifetime allowance has been abolished, but an individual is entitled to have their lump sum allowance and lump sum death benefit allowance protected. Individuals did not need to have already built-up pension savings of more than £1,500,000 to apply. Lump sum allowance with IP14

For an individual with IP14, the lump sum allowance will be the less of £375,000 or 25% of the individual’s relevant amount. Lump sum and death benefit allowance with IP14 For an individual with IP14, their lump sum and death benefit allowance will be the lowest of £1,500,000, the individual's relevant amount, or, where an enhancement factor applies, the individuals enhanced lump sum and death benefit allowance.If an individual had any benefit crystallisation event occur prior to 6 April 2024 then they will need to review the standard transitional calculations for their lump sum allowance and lump sum and death benefit allowance with IP14 at PTM174600 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174600).

Individual protection 2016 (IP16)

Paragraph 9 Schedule 4 Finance Act 2016 On 5 April 2016, Individuals who had pension savings in excess of £1,000,000 could apply to HMRC for IP16 to protect them from the lifetime allowance charge when those rights come into payment after 5 April 2016. As of 6 April 2024, lifetime allowance has been abolished, but an individual is entitled to have their lump sum allowance and lump sum death benefit allowance protected. Individuals did not need to have already built-up pension savings of more than £1,250,000 to apply. Lump sum allowance with IP16 For an individual with IP16, the lump sum allowance will be the less of £312,500 or 25% of the individual’s relevant amount. Lump sum and death benefit allowance with IP16For an individual with IP16, their lump sum and death benefit allowance will be the lowest of £1,250,000, the individual's relevant amount, or, where an enhancement factor applies, the individuals enhanced lump sum and death benefit allowance.If an individual had any benefit crystallisation event occur prior to 6 April 2024 then they will need to review the standard transitional calculations for their lump sum allowance and lump sum and death benefit allowance with IP16 at PTM174600 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm174600).

Losing or reduction of individual protection

An individual with either IP14 or IP16 who becomes subject to a pension debit as a result of a pension sharing order may have their level of protection reduced or lose protection altogether.