In October 2010, HMRC announced that pension tax relief would be restricted by reducing the annual allowance from April 2011 and also the lifetime allowance from April 2012. Draft legislation given effect to the reduction in the lifetime allowance was published on 9 December 2010.
From 6 April 2012, the lifetime allowance is reduced from £1.8m to £1.5m. However, protection, known as fixed protection, will be available for those who expect their pension benefits to exceed £1.5m.
HMRC have published guidance on how the reduced lifetime allowance will operate. The guidance is available on the HMRC website.