Calculate your position against the 2026/27 pension Lump Sum Allowance (£268,275) and Lump Sum and Death Benefit Allowance (£1,073,100) following the LTA abolition in April 2024.
Last updated: April 2026
Your pension position
DB pensions count as 20x the annual pension amount for lump sum allowance purposes.
Allowances (2026/27)
Standard 2026/27: £268,275. May be higher if you have enhanced or fixed protection.
Standard 2026/27: £1,073,100. Same as old LTA for lump sum on death purposes.
Lump sum allowance position
Total pension value
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Projected DC pot at retirement -
DB value (20x annual pension) -
Tax-free cash available (LSA) -
LSA used as % of allowance -
LSDBA used as % of allowance -
The Lump Sum Allowance and what replaced the LTA
The Lifetime Allowance (LTA) - the limit on total tax-privileged pension savings - was abolished from April 2024. In its place, two new allowances restrict the tax-free benefits that can be taken from pensions. The Lump Sum Allowance (LSA) of £268,275 limits the total tax-free cash that can be taken across all pension benefits crystallised in a lifetime. The Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100 limits tax-free lump sums paid on death before age 75.
How the LSA works in practice
When you take benefits from a DC pension, you can take up to 25% of the crystallised amount as a Pension Commencement Lump Sum (PCLS), tax-free. Each PCLS taken is deducted from your remaining LSA. Once the LSA is exhausted, further lump sums from pensions are taxable as income. With a standard LSA of £268,275, you exhaust it when the total tax-free cash across all crystallisations reaches £268,275 - which occurs when crystallising approximately £1,073,100 of pension assets (£268,275 / 25%). For pots above this, additional withdrawals are fully taxable.
Protection from previous regimes
Some individuals have protection from the old LTA regime that also affects their new allowances. Enhanced Protection, Fixed Protection 2012, 2014 and 2016 may give a higher LSA than the standard £268,275. If you have any form of HMRC protection, the calculation of your allowances is more complex - specialist advice is essential. Applying for protection after April 2025 is no longer possible, but existing protection certificates remain valid.
Frequently asked questions
Not quite. The Annual Allowance (£60,000 in 2026/27) still caps how much can be contributed with tax relief each year. The LTA abolition removes the tax charge on large accumulated pots at retirement, which was the main concern for high earners. You can now accumulate a pension pot of any size without facing an LTA charge when you draw benefits - but withdrawals above the LSA limit are still taxable as income. The removal of the LTA charge makes large pension contributions more attractive for high earners than they were under the old regime.
For the purposes of the Lump Sum Allowance and LSDBA, a DB pension is valued at 20 times the annual pension amount, plus any lump sum payable. For example, a DB pension of £20,000 per year is valued at £400,000. This valuation is used to assess how much of the PCLS allowance has been used by the DB lump sum commutation, and how much remains for DC benefits. If you have both a DB and DC pension, the total LSA usage across both must not exceed £268,275 in tax-free cash.
If your total pension savings could crystallise with more than £268,275 of tax-free cash entitlement, there are planning options worth considering with a financial adviser: taking benefits in stages over time, using phased crystallisation to spread tax liability, considering the most tax-efficient order in which to draw from DB and DC pensions, and assessing whether enhanced annuity income (fully taxable but high) might be more tax-efficient than excess lump sums. For very large pots, the order and timing of benefit crystallisation can make a material difference to total tax paid in retirement.