These members are not affected by the new pension tax rules. They can continue contributing and can continue to protect their PCLS at a higher amount, rather than being restricted to £268,275.
Late applications
Applications for primary and enhanced protection closed on April 5 2009. Applications for fixed protection 2012 closed April 5 2012, and for fixed and individual protection 2014 they closed on April 5 2014.
Applications for fixed and individual protection 2016 are still open — there has never been a final closing deadline. Also, it might be theoretically possible to put in a late application for LTA protection for the earlier protections. However, although late applications have been successful in a handful of cases, it is difficult to see many more being accepted.
For those who are successful, or who apply for fixed or individual 2016 protection on or after March 15 2023, then for those with enhanced or fixed protection it is worth stressing they will lose their protection, and any tax-free cash protection, if they subsequently contribute to their pension as this will break the protection rules.
Scheme-specific protection
Finally, it is worth mentioning that scheme-specific protection of higher tax-free cash amounts continues. As a reminder, generally those with this protection can take 120 per cent of their PCLS at A-Day, plus 25 per cent of the post A-Day fund growth (and contributions if they were eligible to make them).
Any scheme-specific protection has to be fed into any calculations of higher PCLS entitlements.
Also note that the value of any rarely encountered, stand-alone lump sums — where 100 per cent of the fund is paid at a tax-free lump sum — will be capped at their value on April 5 2023.
Rachel Vahey is head of policy development at AJ Bell
