Investment Jargon: Lump Sum Allowance (LSA)

Lump Sum Allowance (LSA)

The maximum amount you can normally take from your pension as tax-free cash over your lifetime. It replaced the old lifetime allowance system in April 2024. In practice, 25% of what you withdraw is usually tax-free up to this overall cap, so larger pension pots may not get the full 25% tax-free treatment on everything. You can check the current UK allowance on the gov.uk lump sum allowance page.