Pension changes: Launch of the lifetime allowance online service

By Susan Cattell and Christine Scott

28 July 2016

Susan Cattell, ICAS Head of Tax (England & Wales), and Christine Scott, ICAS Assistant Director, Charities and Pensions, give an update on how pension savers can apply to protect their savings.

Background: changes to the lifetime allowance

The lifetime allowance is the amount of savings you can take from your pension schemes without facing a tax charge. Our article in December 2015 outlined the latest reduction in the lifetime allowance for pension savings. It had already been reduced in 2012 and 2014 and from April 2016 it reduced again to £1m. As with previous reductions it may be possible for pension savers to protect themselves from the reduction, if they meet the relevant conditions.  

The new online service for applying for protection

An interim paper application process has been in place since April 2016. This has now been replaced by HMRC’s new online service which launched on 28 July 2016. The new online service should be used to apply for fixed protection 2016 (FP2016) and individual protection 2016 (IP2016). It also replaces the online form for applying for individual protection 2014 (IP2014).

Pension savers who are unable to use the online service can contact the HMRC Pensions helpline for help with applying for protection - Pension schemes - Contact HM Revenue & Customs - GOV.UK

How do I access the service?

There is guidance on the online service on GOV.UK:  Pension schemes: protect your lifetime allowance - Detailed guidance - GOV.UK.

An HMRC Online Services Account has to be created. Alternatively, if you already have an account the service will be accessible from that account. To create an account or log in to your existing one you should go to HMRC services: sign in or register - GOV.UK.

Paper certificates with lifetime allowance protection details will no longer be issued but it will be possible to print the details from the online account if necessary.  

Withdrawal of the interim paper application process

HMRC will stop processing applications for lifetime allowance protection made using the interim process. Any applications made after 31 July 2016 using the interim, paper process will be returned and applicants will be directed to the online service.

HMRC will process any interim applications on hand at 31 July 2016: if the application is successful HMRC will issue a permanent protection notification number. Recipients of these will not need to reapply online and will be able to view details of their protection in their HMRC Online Services Account. If they don’t already have an account, they will have to create one.  

Temporary reference numbers

In Pension Schemes Newsletter 78, HMRC explained that from August 2016 onward it will only recognise permanent protection notification numbers. Pension scheme administrators will need to be able to check their members’ protections through a look-up service which will become available later in the year. This service will only validate permanent numbers.

Individuals with temporary reference numbers (issued under the interim process) will need to follow up with an online application. When an individual applies for a permanent protection notification number, details of their IP2016 or FP2016 (and any previous lifetime allowance protections) will appear in their personal tax account.


  • Pensions
  • Tax

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