Pension Lump Sum Allowance Calculator

The Lifetime Allowance (LTA) was abolished from 6 April 2024. It was replaced by two new allowances: the Lump Sum Allowance (LSA) of £268,275 — which caps the total tax-free pension cash you can take in your lifetime — and the Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100.

The LSA limits the total tax-free cash (Pension Commencement Lump Sum and Uncrystallised Funds Pension Lump Sum tax-free elements) you can take across all pension schemes in your lifetime. This £268,275 is exactly 25% of the old LTA of £1,073,100. Previously, 25% of the LTA was available as tax-free cash.

If you took tax-free cash before April 2024, the amount used is calculated based on the LTA event value: the previous PCLS × (old LTA / pension fund value at time of event) = the LSA used. HMRC provides transitional certificates for complex cases. Previous benefits reduce your remaining LSA.

Normally no — the standard maximum is 25% of the fund value, capped at the LSA. However, people with pre-April 2006 'scheme-specific lump sum protection' may have a higher entitlement based on the rules of their specific old scheme.

Tax-free cash above your remaining LSA is taxed as income at your marginal rate in the year you take it. There is no additional special charge (unlike the old LTA charge of 55% on some excess). It's simply treated as employment income.

LTA protection (Primary, Enhanced, Individual, Fixed) was originally about protecting a higher LTA. Post-April 2024, the LTA no longer exists, but protection holders may have a higher LSA. Enhanced Protection holders with protected lump sums may be able to take more than £268,275 tax-free. Seek specialist pension advice if you have LTA protection.

The Lump Sum and Death Benefit Allowance (LSDBA — £1,073,100) limits the total pension tax-free amounts paid out over a lifetime including death benefits. The LSA (£268,275) specifically limits tax-free cash taken during the member's lifetime. The LSDBA is tested against lump sums paid on the member's death.

Not necessarily. You can take pension benefits in stages — each crystallisation uses some of your LSA. Taking all tax-free cash at once wastes future potential if your fund grows further. Phased retirement strategies allow you to take small amounts of tax-free cash as needed, preserving your LSA.