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Individual protection 2014 and 2016
Not a fixed ceiling but a personalised one, pegged to the fund a member actually held. Two vintages, two bands — and, unlike fixed protection, you can keep saving.
Based on HMRC’s Pensions Tax Manual (PTM176500, PTM171000, PTM172000) and Finance Act 2024 Schedule 9.
6 min read · Last reviewed
Individual protection answers a different question from fixed protection. Fixed protection freezes a standard ceiling for everyone who qualifies; individual protection sets a personalised one, pegged to the fund the member actually held on a snapshot date. And it carries no promise to stop saving — its great advantage.
The rule: a personalised allowance within a band
Individual protection protects the value of the member’s pension rights on a snapshot date, within a band set by the vintage. IP2014 looks at the value on 5 April 2014 and protects an amount between £1.25m and £1.5m. IP2016 looks at 5 April 2016 and protects between £1m and £1.25m. Whatever the protected value, the lump sum allowance is 25% of it, and the lump sum and death benefit allowance is the protected value in full.
- IP2016, fund protected at £1,200,000
- £300,000 LSA · £1,200,000 LSDBA
- IP2016 at the £1,000,000 floor
- £250,000 LSA · £1,000,000 LSDBA
- IP2014, fund protected at £1,400,000
- £350,000 LSA · £1,400,000 LSDBA
- Standard (no protection)
- £268,275 LSA · £1,073,100 LSDBA
These are the figures our engine returns for those protected values, reproduced to the penny by the calculation tests. Note the floor case: an IP2016 member protected at exactly £1m has a £250,000 lump sum allowance — below the standard £268,275. Individual protection only raises the lump sum allowance where the protected value is above the £1,073,100 standard line; below it, the standard £268,275 allowance is the higher of the two for LSA purposes (though the protection may still matter for the LSDBA).
The common error: assuming it always beats the standard allowance
Because individual protection is personalised, it does not always give more than the standard allowance — only more than the old lifetime allowance the member would otherwise have faced. An IP2016 member whose 2016 fund was modest can hold a protected figure that is now worth less than £268,275 at the LSA level. Always compare the protected figure with the standard line before treating the protection as an uplift.
What to do with it
Read the protected value off the certificate, check it sits in the right band for its vintage, and take 25% of it as the lump sum allowance. The lump sum allowance calculator then works how a crystallisation consumes that allowance and whether an excess charge arises — the protected figure replaces the standard ceiling it starts from.
PTM176500 (individual protection 2014 / 2016) · PTM171000 / PTM172000 · FA 2024 Sch 9
Common questions
- What is the difference between individual protection 2014 and 2016?
- They peg the allowance to the fund value on different dates and within different bands. IP2014 protects a value of £1.25m–£1.5m measured on 5 April 2014; IP2016 protects £1m–£1.25m measured on 5 April 2016. In both, the lump sum allowance is 25% of the protected value and the LSDBA is the protected value in full.
- Can you keep contributing with individual protection?
- Yes. Unlike fixed protection, individual protection is not lost by continued saving — further contributions are allowed, they simply are not protected. Fixed protection, by contrast, is forfeited the moment benefits accrue.
Sources & grounding
- Engine-pinned: applyProtection({ kind: "IP2016", protectedLTA: pence(120_000_000) }, getConfig("2026-27")) → protectedLSA £300,000 (30,000,000p), protectedLSDBA £1,200,000 (120,000,000p); applyProtection({ kind: "IP2014", protectedLTA: pence(140_000_000) }) → £350,000 / £1,400,000. LSA = 25%×protectedLTA, LSDBA = protectedLTA (calc-engine/pension/protection.ts). Reproduced 0p in lump-sum-protections-content.test.ts.
- Bounds enforced by the engine and the legislation: IP2014 protectedLTA must be £1.25m–£1.5m; IP2016 must be £1m–£1.25m (PTM176500; IP2014_MIN/MAX, IP2016_MIN/MAX in protection.ts). The protected amount is the lower of the member’s fund value on 5 April 2014 / 2016 and the vintage cap.
- Standard LSA £268,275 / LSDBA £1,073,100 (PTM171000 / PTM172000). Rule basis PTM176500; F(2)A 2023 / FA 2024 Sch 9 re-expresses the protected lifetime allowance as the protected LSA + LSDBA.
For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.