HM Revenue & Customs ("HMRC") has updated its guidance aimed at helping individuals with fixed protection ensure that they do not lose this protection.

HMRC has now confirmed that where an employer auto-enrols an employee into their pension scheme outside the Pensions Act 2008 provisions, the member will normally lose their fixed protection because they will have started a new pension arrangement. However, fixed protection will not be lost if the scheme has a legally binding rule that treats an individual who opts out of scheme membership as never having been a member of the scheme, or (in the case of a personal pension scheme) the individual cancels his contract with the provider under the FSA cancellation rules and the contract is treated as void from the outset.

This stance on fixed protection is a move away from HMRC's previous position, and is likely to be welcomed by the pensions industry and by affected individuals.