Pension protections provide a tax shield if you were affected by the introduction and changes made to the lifetime pension allowance — currently at £1,055,000.
If a person has a pension pot valued above the lifetime pension allowance, additional tax on the excess of the value has to be paid. Certain individuals can ask HMRC for an exception — to "protect" themselves against additional tax to a certain level. However, an individual would have to apply for a pension protection, it is not granted automatically.
If you think your pension may grow to more than the lifetime allowance before you plan to use it, you can find out more on the HMRC website here: www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance.
If you have one or more pension protection certificates you can select them on the pension protection step during the pension setup process. If you have fixed or individual protection from the change in lifetime pension allowance in 2016, please give us a call to ensure this is captured for you.