This is an insurance contract that can be included to protect your pension contributions in the event of long term illness, previously known as Waiver Of Premium. Although for many, this is not an option that was ever included in their policy and therefore not relevant, it is important to note that contracts taken out before 6th April 2001 still benefit from tax relief on the contributions towards this premium. Contracts taken out after the 6th April 2001 do not allow tax relief on the Premium Protection contributions and is therefore a factor a financial adviser will consider in making a decision.

Contributions over £3600 per annum

As a Premium Protection contract started on or after 6th April 2001 is considered a separate contract, the maximum contribution you can insure will drop to £3600 per annum after 5 years contributions. This is because you can continue your contributions into a pension contract on the basis of your current year's earnings for a further 5 years, after which the maximum will revert £3,600 per annum gross, on the basis of a Non-Earner. This is an insurance contract that can be included to protect your pension contributions in the event of long term illness, previously known as Waiver Of Premium. It is important to note that contracts taken out before 6th April 2001 still benefit from tax relief on the contributions towards this premium. Contracts taken out after the 6th April do not allow tax relief on the Premium Protection contributions and therefore this could influence the value of your fund.