What is the difference between the LSA and the LSDBA?

The lump sum allowance (£268,275) caps tax-free lump sums you take in your lifetime. The lump sum and death benefit allowance (£1,073,100) caps tax-free lump sums across life and death. The LSA is a sub-limit within the LSDBA.

Does taking tax-free cash use up both allowances?

Yes. A pension commencement lump sum, or the tax-free 25% of a UFPLS, reduces both the LSA and the LSDBA by the same amount. So lifetime tax-free cash erodes the death-benefit allowance too.

What is the LSDBA for in 2024/25?

The standard lump sum and death benefit allowance is £1,073,100 — the same figure as the old lifetime allowance, but now a ceiling on tax-free lump sums (including death benefits before 75 and serious-ill-health lump sums) rather than on total pension value.

What happens above the allowance?

The excess is taxed at the recipient’s marginal income tax rate. The old lifetime-allowance charges (55% on lump sums, 25% on income) were abolished from 6 April 2024.

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LSA vs LSDBA: the two lump-sum allowances, compared

Two allowances replaced the lifetime allowance in 2024. One governs tax-free cash while you’re alive; the wider one also governs lump sums paid on death before 75.

5 min read · Last reviewed 16 Jun 2026

When the lifetime allowance was abolished on 6 April 2024, two new allowances replaced it. The lump sum allowance (LSA) — £268,275 — caps the tax-free lump sums you can take in your lifetime. The lump sum and death benefit allowance (LSDBA) — £1,073,100 — caps tax-free lump sums across both life and death. The LSA sits inside the LSDBA.

Side by side

The two allowances (standard figures, 2024/25 onwards)

Lump sum allowance (LSA): £268,275
Lump sum & death benefit allowance (LSDBA): £1,073,100
LSA — what it covers: tax-free cash in life (PCLS, tax-free part of UFPLS)
LSDBA — what it covers: the above PLUS tax-free death-benefit & serious-ill-health lump sums
Relationship: LSA is a sub-limit within the LSDBA
Excess over the allowance: taxed at the recipient’s marginal rate

£268,275 is exactly 25% of the old £1,073,100 lifetime allowance — the tax-free-cash entitlement carried over into the new regime. The LSDBA keeps the full £1,073,100 figure, but now as a ceiling on tax-free lump sums rather than on total pension value.

How they interact

A tax-free lump sum taken in life — a pension commencement lump sum, or the tax-free 25% of a UFPLS — uses up both allowances together: it reduces the LSA and the LSDBA by the same amount. So someone who takes their full £268,275 of tax-free cash has exhausted the LSA, but still has £804,825 of LSDBA left (£1,073,100 − £268,275) — and that remaining headroom only matters on death.

The events that test against the LSDBA onlyare the ones that can't happen in ordinary lifetime drawdown: a tax-free lump sum paid on death before age 75, and a serious-ill-health lump sum. Past 75, lump-sum death benefits are taxable on the recipient and don't test against the LSDBA at all. The excess over either allowance is taxed at the recipient's marginal rate, not at a flat lifetime-allowance charge — the old 55%/25% charges are gone.

The frequent confusion is treating the two as one number, or assuming the LSDBA is a fresh £1,073,100 on top of the LSA — it isn't; lifetime cash erodes both. Model the in-life cap on the lump sum allowance calculator and the death-benefit side on the LSDBA calculator. The detail of each is in the LSA explainer and the LSDBA explainer.

PTM171000 (LSA) · PTM172000 (LSDBA) · FA 2024 Sch 9 (abolition of the lifetime allowance)

Common questions

What is the difference between the LSA and the LSDBA?: The lump sum allowance (£268,275) caps tax-free lump sums you take in your lifetime. The lump sum and death benefit allowance (£1,073,100) caps tax-free lump sums across life and death. The LSA is a sub-limit within the LSDBA.
Does taking tax-free cash use up both allowances?: Yes. A pension commencement lump sum, or the tax-free 25% of a UFPLS, reduces both the LSA and the LSDBA by the same amount. So lifetime tax-free cash erodes the death-benefit allowance too.
What is the LSDBA for in 2024/25?: The standard lump sum and death benefit allowance is £1,073,100 — the same figure as the old lifetime allowance, but now a ceiling on tax-free lump sums (including death benefits before 75 and serious-ill-health lump sums) rather than on total pension value.
What happens above the allowance?: The excess is taxed at the recipient’s marginal income tax rate. The old lifetime-allowance charges (55% on lump sums, 25% on income) were abolished from 6 April 2024.

Sources & grounding

Figures: standard lump sum allowance £268,275 and standard lump sum and death benefit allowance £1,073,100 — from the published lump-sum-allowance-explained and lsdba-explained cluster articles (articles-clusters.tsx), grounded in FA 2024 Sch 9 / PTM171000 / PTM172000.
Rule basis: HMRC PTM171000 (lump sum allowance), PTM172000 (lump sum and death benefit allowance) — what each allowance measures and which lump sums test against which. Both replaced the lifetime allowance from 6 April 2024 (Finance Act 2024, Schedule 9).
Relationship (LSA is a sub-limit within the LSDBA; tax-free cash uses both; serious-ill-health and death-benefit lump sums use only the LSDBA): PTM171000 / PTM172000.

For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.