Lump sums and protections · Protected allowances
Individual protection 2014 and 2016
Skip to calculators for this topicNot a fixed ceiling but a personalised one, pegged to the fund a member actually held. Two vintages, two bands — and continued saving never cancels it.
3 min read · Last reviewed
— In short
Individual protection sets a personalised lump sum allowance equal to 25% of the fund value a member held on a snapshot date, with the death benefit allowance being that value in full. IP2014 pegs to 5 April 2014 within a £1.25m to £1.5m band; IP2016 pegs to 5 April 2016 and, from 6 April 2024, applies only where that value is above £1,073,100 (capped at £1.25m). Continued saving does not forfeit individual protection — further contributions simply are not protected.
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Calculators for this topic (3)
Individual protection sets a personalised lump sum allowance, pegged to the fund the member actually held on a snapshot date. Fixed protection freezes a standard ceiling for everyone who qualifies. Individual protection itself carries no promise to stop saving.
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 a value above £1,073,100, capped at £1.25m (the original £1m entry point was raised to £1,073,100 for 2024-25 onwards). Where it applies, the lump sum allowance is 25% of the protected value, 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, fund protected at £1,000,000
- no uplift — standard £268,275 LSA · £1,073,100 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
Note the low case: IP2016 only applies where the protected value is above £1,073,100 (FA 2016 Sch 4 para 9(1)(b), as amended for 2024-25 onwards). A member whose protected value is £1m gets no IP2016 uplift at all — they take the standard £268,275 lump sum allowance and £1,073,100 lump sum and death benefit allowance.
The common error: assuming it always beats the standard allowance
Because individual protection is personalised, it only lifts the allowances where the protected value is above the standard £1,073,100. An IP2016 member whose 2016 fund was between £1m and £1,073,100 gets no uplift and keeps the standard allowances — do not key the protected figure in as a lower ceiling. 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.
PTM176510 (individual protection 2014 / 2016) · FA 2016 Sch 4 para 9 (IP2016, the £1,073,100 gate) · PTM171000 / PTM172000 · FA 2024 Sch 9
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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 a value above £1,073,100 (up to £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. Individual protection is not lost by continued saving — further contributions are allowed, they simply are not protected. Fixed protection differs: a valid application received on or after 15 March 2023 remains subject to benefit-accrual cessation rules, while one received before that date can accrue from 6 April 2023 without losing a still-valid protection.
Sources
Based on HMRC’s Pensions Tax Manual (PTM176510, PTM171000, PTM172000) and Finance Act 2024 Schedule 9.
- HMRC Pensions Tax Manual, PTM176510 — Lump sum allowance and lump sum and death benefit allowance: Individual protection: Overview gov.uk
- HMRC Pensions Tax Manual, PTM171000 — Lump sum allowance and lump sum and death benefit allowance: lump sum allowance gov.uk
- HMRC Pensions Tax Manual, PTM172000 — Lump sum allowance and lump sum and death benefit allowance: Lump sum and death benefit allowance gov.uk
- Finance Act 2024, Schedule 9 legislation.gov.uk
- HMRC Pensions Tax Manual, PTM174600 — Lump sum allowance and lump sum and death benefit allowance: Transitional rules for the tax year 2024-25: Individual protection gov.uk
For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.