From 6 April 2014 the lifetime allowance will be reduced to £1.25m.
If your pension savings are worth more than the lifetime allowance, then when you take your benefits, you may have to pay the lifetime allowance tax charge on the excess unless you have some form of lifetime allowance protection. Lifetime allowance protection was introduced so that those with pots already worth more than the limit didn’t have to pay the lifetime allowance tax charge on pension pots built up before the rules changed.
As the lifetime allowance will be reduced to £1.25m from 6 April 2014, a new form of protection called fixed protection 2014 is being introduced to protect those who have built up pension pots of more than £1.25m but no more than £1.5m. People can apply for fixed protection 2014 from August 2013.
Should this apply to you, please get in touch.