Lump Sum Allowance Calculator

Nothing has been announced. As of 25 September 2026 the law still lets you take 25% of each pension tax-free, capped at £268,275 across all your pensions.

Speculation about cutting it comes before almost every Budget, but the October 2024 and November 2025 Budgets both left it unchanged. The next Budget is on 28 October 2026.

A cut would need legislation, and past changes to pension allowances have usually started from a future date, with protection for people who had already built up entitlement. Taking cash early to beat a rumour is irreversible: money outside the pension loses tax-free growth, and paying it back in can break the recycling rules.

We will update this page on Budget day.

The lump sum allowance (LSA) is £268,275. It is the total TAX-FREE cash you can take from all your registered pension schemes across your lifetime, and it replaced the lifetime allowance on 6 April 2024.

The figure is exactly 25% of the old £1,073,100 lifetime allowance, which is why most people's tax-free entitlement did not change at the point of the reform. Anything you take above the LSA is not blocked — it is simply taxed at your marginal rate of income tax rather than being tax-free.

If you hold valid lifetime allowance protection your personal LSA is higher than the standard figure.

Yes. The lifetime allowance was abolished on 6 April 2024, so there is no longer any cap on how large a pension pot may grow, and no lifetime allowance charge.

This matters because provider 'lifetime allowance calculators' that are still online may be modelling a tax that no longer exists. Two allowances replaced it: the lump sum allowance (£268,275), which caps tax-free cash in your lifetime, and the lump sum and death benefit allowance (£1,073,100), which also covers serious ill-health lump sums and lump sum death benefits paid on death before age 75.

If you are searching for a lifetime allowance calculator, the lump sum allowance is almost certainly the number you now need.

If you crystallised benefits between 6 April 2006 and 5 April 2024, HMRC applies the standard transitional calculation: it assumes your tax-free cash was 25% of the lifetime allowance you used, and deducts that deemed amount from your £268,275 LSA. For example, using 50% of the old £1,073,100 lifetime allowance produces a deemed tax-free amount of £134,138 — exactly half the LSA — leaving £134,138 of allowance.

Using half the old lifetime allowance leaves half the new lump sum allowance, which is the quickest sanity check on any figure you are given. The important catch is that this is an ASSUMPTION, not your actual history — if you genuinely took less tax-free cash than the deemed figure, the standard calculation understates what you have left.

A TTFAC replaces HMRC's deemed 25% assumption with the tax-free cash you ACTUALLY took before 6 April 2024. It is worth applying for whenever your real tax-free cash was less than 25% of the lifetime allowance you used — common if you took a scheme pension with little or no lump sum, or took benefits under a defined benefit scheme with a low commutation factor.

You apply to a pension scheme you are a member of, with evidence of the amounts actually paid, and you must do it BEFORE taking your next relevant lump sum: once that lump sum is paid the opportunity is gone. Members whose only pension started before 6 April 2006, with no benefit crystallisation event since, cannot apply.

No, and confusing the two is the most common mistake in this area. The ANNUAL allowance is a yearly limit on what can be PAID IN to your pensions with tax relief — £60,000 for most people, reduced by tapering for high earners and to £10,000 by the money purchase annual allowance once you flexibly access a pot.

The LUMP SUM allowance is a once-in-a-lifetime limit on what you can TAKE OUT tax-free, £268,275 across all schemes. One governs contributions, the other governs withdrawals, and they are tested at completely different moments.

Nothing is refused or clawed back. Exceeding the lump sum allowance simply means the excess is not tax-free: it is taxed as pension income at your marginal rate, so 20%, 40% or 45% depending on your total income in that tax year.

Because it lands on top of your other income it can also push you into a higher band, and a large lump sum can temporarily restrict allowances that taper with income. In practice the planning question is rarely whether to exceed the LSA but WHEN to take amounts above it, since spreading withdrawals across tax years can keep more of the excess in a lower band.

Across all of them. The £268,275 is a single personal allowance covering every registered pension scheme you belong to — workplace schemes, personal pensions and SIPPs combined.

Each scheme will normally offer you up to 25% of that individual pot as tax-free cash, so it is entirely possible for the separate offers to add up to more than your remaining LSA without any single scheme doing anything wrong. Keeping a running total of tax-free cash taken is your responsibility, not any one provider's, which is what this calculator is for.