Enhanced protection offers full protection against a lifetime allowance tax charge. This is on the condition that all contributions or other relevant benefit accrual ceased before A-Day (6 April 2006). Anyone could apply for this protection regardless of the value of their pension savings at A-Day.
What is enhanced LTA protection?
Enhanced protection was introduced for people who, at 5 April 2006, expected their pension benefits to be over the newly introduced lifetime allowance (LTA) when they intended to take them and wanted to avoid an LTA excess charge.
What is an enhanced pension scheme?
An ETV is a transfer value that has been enhanced, either by offering an employee a larger sum than their pension, or by offering a cash bonus in return for taking the ETV. … An ETV can also protect an employee’s pension pot if their employer goes into administration.
How do I know if I have lifetime allowance protection?
To check if your member has valid lifetime allowance protection, you can use the lifetime allowance scheme administrator look-up service. To use the look-up service you’ll need your member’s protection notification number and their scheme administrator reference.
Is it worth exceeding the lifetime allowance?
Otherwise, you’re going to pay the lifetime allowance tax charge. However, there are circumstances where it may make sense to exceed the lifetime allowance. … These are very valuable pensions and the income you receive from them is normally worth far more than any tax charge that will apply.
What is an enhanced lifetime allowance?
Enhanced protection offers full protection against a lifetime allowance tax charge. This is on the condition that all contributions or other relevant benefit accrual ceased before A-Day (6 April 2006). … It was introduced to protect individuals whose benefits were likely to exceed the LTA.