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Public sector pensions: Extended deadline for LTA protections

Public sector pensions: Extended deadline for LTA protections

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Date

16 May 2025

Category

Tax

Author

James Broom

Public sector pensions: Extended deadline for LTA protections

Although the Lifetime Allowance (LTA) was abolished from 6 April 2024, it remains a relevant concept for determining the maximum amount of tax-free cash - commonly referred to as the Pension Commencement Lump Sum (PCLS) - that can be taken upon retirement.

Originally, the deadline to apply for FP16 and IP16 was set for 6 April 2025. However, due to the complexities surrounding the McCloud Remedy - which addresses age discrimination in public service pension schemes - many affected individuals may have been unaware that they were eligible to apply for these protections. In some cases, making an election could result in a significantly improved tax position at retirement.
In recognition of this, the government has extended the application deadline for both FP16 and IP16 to 6 April 2027. This extension is particularly relevant for members of Public Service Pension Schemes, including those in the NHS, Police, Fire and Rescue Services, the Armed Forces, and other similar sectors. Affected individuals should review their pension arrangements and consider seeking financial advice to assess whether applying for protection could be advantageous in light of the changes introduced by the McCloud Remedy.

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James Broom

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