Lost fixed protection?

TroTro

I have lifetime allowance fixed protection and was recently auto-enrolled into a new pension scheme.  I sent my employer a copy of my protection certificate but didn't realise that I was also supposed to opt out via the pension provider's website.  Apparently I have missed their opt-out window by about a week and am now enrolled and believe that I risk losing my fixed protection as a result.  The potential consequences of this for my retirement are grave and I'm very concerned - can anyone suggest what my best next steps are? I've appealed to my employer but if they can't help should I approach HMRC or the Pension Regulator or another body for example?  Any pointers would be much appreciated.

Marcon

TroTro said:

I have lifetime allowance fixed protection and was recently auto-enrolled into a new pension scheme.  I sent my employer a copy of my protection certificate but didn't realise that I was also supposed to opt out via the pension provider's website.  Apparently I have missed their opt-out window by about a week and am now enrolled and believe that I risk losing my fixed protection as a result.  The potential consequences of this for my retirement are grave and I'm very concerned - can anyone suggest what my best next steps are? I've appealed to my employer but if they can't help should I approach HMRC or the Pension Regulator or another body for example?  Any pointers would be much appreciated.

The Regulator won't be interested - this is a personal matter where you (not a pension scheme/employer) has made the error, so they can't and won't get involved.

It's a tax matter, so one for HMRC. Before contacting them, you might want to have a word with TPAS (https://www.pensionsadvisoryservice.org.uk), who will almost certainly have come across this situation before and might be good for some helpful wording. Their service is free and impartial.

EdSwippet

With most employers, there is a lag of a few weeks between your pay date and the date that your pension contributions turn up in the employer's plan. Given that, maybe also get in touch directly with the new pension provider, to see if you can get them to reject any contributions to your plan from your employer. That way, you won't have 'accrued' any additional pension benefits.

Looking at the text of the actual law, the trigger may be simply enrolment in a new scheme, but if that new scheme never received any new pension contributions I think that could put you on firm ground for any future appeal.

I hope you can sort this out. Please drop by and let us know. The pensions auto-enrolment and fixed protection rules taken together can create some truly appalling tax traps, and it's always down to the individual to be completely alive to the danger. UK pensions rules and laws are a mess in general, but this is far and away one of the worst parts of that mess.

This article sounded the warnings quite a few years ago: The hidden pain in auto-enrolment (Investors' Chronicle, September 14, 2012). The government has fixed nothing in the interim.

jamesd

HMRC will normally reinstate the protection in cases like this when you ask them. But first contact the pension company, ensure they know about the protection certificate and ask them to fix it as an error.

TroTro

Thanks to all for the feedback.  I spoke with the Pensions Advisory Service who were helpful and highlighted a First Tier Tribunal case (Hymanson) which I could reference in an approach to HMRC.  Happily before I reached that point my employer reviewed my case and has worked with the pension company to fix the error, unwinding the contributions in such a way that I will be deemed to have never been a member of the Scheme and keeping my Fixed Protection intact.  It's such a relief to have this sorted - thanks again for all the help.

mark55man

so easy to fall foul of ignorance (guilty many times), but not quite sure I've seen 2 bits of legislation so much at odds with each other so as to cause such a clash