Lump sum allowance (LSA)
The maximum amount you can take as a tax-free lump sum from your pensions — £268,275 for 2025/26. Replaced the lifetime allowance in April 2024.
When the lifetime allowance was abolished in April 2024, it was replaced by the lump sum allowance (LSA) and the lump sum and death benefit allowance (LSDBA). The LSA caps the total tax-free cash you can take from all your pensions at £268,275 — equivalent to 25% of the old £1,073,100 LTA.
Anything above this cap is taxed at your marginal income tax rate. For most people with pots under ~£1 million, the 25% rule still applies as before. The LSA only bites for larger pots where 25% would exceed £268,275.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.