The Lump Sum Allowance (LSA) is currently set at £268,275. LSA limits the amount of tax free lump sums (and the tax free elements of lump sums) that you can take in your lifetime.
You’ll also need to have available Lump Sum and Death Benefit Allowance (LSDBA), which, at £1,073,100, is higher than the LSA. If you have available LSA, you’ll usually have sufficient LSDBA, unless you’ve taken a Serious Ill Health Lump Sum (SIHLS) from another pension arrangement.
Annual Allowance
The Annual Allowance (AA) limit is set by the Treasury and is currently £60,000 for the 2025/26 tax year. This is the amount by which the value of your pension savings may increase in any one year without you having to pay an excess tax charge. Your personal AA may be less than £60,000 if your taxable income exceeds HMRC limits or you’ve got money purchase/defined contribution pension rights held in another pension scheme, where those rights have been taken as ‘flexible benefits’.
For more details and examples on calculating LSA or AA, you can read our Tax Controls and Pensions savings factsheet.
See our Pension savings hub online which helps you understand what to do if your pension savings in the EAPF have exceeded the standard annual allowance (AA) of £60,000.
Visit our Pension savings hub today!