Lump sums and protections · Guide overview

Lump sum allowances after the LTA: the LSA, LSDBA and TTFAC

The lifetime allowance is gone. Two ceilings on tax-free money took its place — and a certificate that can move the line either way.

4 min read · Last reviewed 8 Sept 2026

— In short

Since 6 April 2024 the lifetime allowance has been abolished, replaced by two ceilings on tax-free money. The Lump Sum Allowance (LSA), £268,275 as standard, caps the tax-free cash taken in life; the Lump Sum and Death Benefit Allowance (LSDBA), £1,073,100, caps tax-free lump sums across life and death together. Amounts above an allowance are taxed at the recipient's marginal rate, and a transitional certificate (TTFAC) can change how much of each is already used.

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Since 6 April 2024 the lifetime allowance is abolished. Two separate ceilings on tax-free money replace it: the Lump Sum Allowance (LSA), £268,275 as standard, caps the tax-free cash you can take in your lifetime; the Lump Sum and Death Benefit Allowance (LSDBA), £1,073,100, caps tax-free lump sums across life and death together. A transitional certificate (TTFAC) can change how much of each you are treated as having already used.

The two allowances — standard values, 2026/27

Lump Sum Allowance (LSA): £268,275
Lump Sum & Death Benefit Allowance (LSDBA): £1,073,100
Tax-free cash on crystallisation: lower of 25% or remaining LSA
Treatment of any excess: member's / beneficiary's marginal rate

Protected members keep higher figures (for example Fixed Protection 2016 gives an LSA of £312,500 and an LSDBA of £1,250,000). The standard figures live in the versioned tax-year config and are cited to FA 2024 Sch 9, PTM171000 (LSA) and PTM172000 (LSDBA).

The Lump Sum Allowance (LSA)

The LSA is the running total of tax-free cash a member can take while alive — principally the pension commencement lump sum (PCLS). Each PCLS consumes the lower of 25% of the amount crystallised or whatever LSA remains. Once the £268,275 is used, further “tax-free” cash is taxed at the member’s marginal rate; the old 55% / 25% lifetime-allowance charges no longer exist.

LSA worked example — a £200,000 PCLS after £100,000 already used

Standard Lump Sum Allowance: £268,275
Already used: −£100,000
Remaining LSA: £168,275
PCLS requested: £200,000
Tax-free (capped at remaining LSA): £168,275
Excess — taxed at marginal rate: £31,725

Full detail and the protection variants are in The Lump Sum Allowance, explained; to run a specific PCLS, use the Lump Sum Allowance calculator.

The Lump Sum and Death Benefit Allowance (LSDBA)

The LSDBA, £1,073,100 as standard, is the wider ceiling: it counts tax-free lump sums paid in life and on death together. PCLS consumes it quietly alongside the LSA; the cases that surprise advisers are serious ill-health and death before age 75, where the whole lump sum is tested against it. Post-75 death benefits are taxed as the beneficiary’s income rather than allowance-tested.

The pre/post-75 boundary and a worked death-benefit excess are in The LSDBA and the £1,073,100 ceiling; the LSDBA calculator tests a specific event. (PTM172000, PTM173000; FA 2024 Sch 9.)

The transitional tax-free amount certificate (TTFAC)

For benefits crystallised before 6 April 2024, even without tax-free cash, the standard rules assume the maximum — a standard deduction of 25% of the lifetime allowance you crystallised. Where the actual tax-free cash was lower, a TTFAC swaps that assumption for the evidenced figure and recovers allowance; where it was higher, the certificate binds against you. On one worked history a certificate recovers £64,620 of LSA; on the mirror case it costs £35,380. A valid certificate cannot be discarded for a better default. An inaccurate certificate must be cancelled and the actual amounts used to recalculate the position.

Whether a certificate helps is an evidence question, not a default — the decision guide is Do I need a TTFAC? and both directions are worked in When a TTFAC helps — and when it hurts. The TTFAC calculator compares the default and evidenced positions side by side. (PTM174300, PTM174200.)

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Common questions

What replaced the lifetime allowance?

Two allowances, from 6 April 2024: the Lump Sum Allowance (£268,275) for tax-free cash taken in life, and the Lump Sum and Death Benefit Allowance (£1,073,100) for tax-free lump sums across life and death. Amounts above an allowance are taxed at the recipient’s marginal rate, not by a separate charge.

What is the lump sum allowance for 2026/27?

£268,275 as standard. Members with valid lifetime-allowance protection keep a higher figure — for example £312,500 under Fixed Protection 2016.

Is the LSDBA the same as the old lifetime allowance?

No. The £1,073,100 figure matches the final standard LTA, but the LSDBA tests only tax-free lump sums (in life and on death) — not the value of pensions in payment. It is a tax-free-cash ceiling, not a total-benefits limit.

Do I need a transitional tax-free amount certificate?

It depends on whether the tax-free cash actually taken before April 2024 was less than the 25%-of-LTA default — less, and a certificate recovers allowance; more, and it costs you. It is an evidence question; see the decision guide above and check the figures in the TTFAC calculator.

Running a real client position? Signed in, each calculator above saves to the client and produces a compliance-annex PDF with the full working and the HMRC references; your logo and colours appear on Pro and Firm. For planning and illustration only; this guide does not constitute financial or tax advice.

Sources

Based on HMRC’s Pensions Tax Manual (PTM171000, PTM172000, PTM174300) and Finance Act 2024 Schedule 9.

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