- The Individual's Lump Sum Allowance (ILSA) is modified if a member has lifetime allowance protection
- The Individual's Lump Sum and Death Benefit Allowance (ILSDBA) is modified if a member has lifetime allowance protection
- Each lump sum has a permitted maximum that is tax-free
Key takeaways from this article
When a client takes a lump sum with a tax-free element, the tax-free portion is limited to the lump sum’s permitted maximum. Generally the tax-free portion will be limited by remaining Individual’s Lump Sum Allowance (ILSA) and remaining Individual’s Lump Sum and Death Benefit Allowance (ILSDBA). However this is not always the case. We have created a comprehensive grid that allows you to compare the ILSA, ILSDBA and permitted maximum for each type of lump sum including where there is protection.
ILSA, ILSDBA and permitted maximum grid
However, if you would simply like to know what the ILSA and ILSDBA is for each protection type, please see the below table.
Protection |
ILSA |
ILSDBA |
No protection |
£268,275 |
£1,073,100 |
Enhanced protection no PTFC |
£375,000 |
£value of uncrystallised funds as at 5/4/24 - across all schemes |
Enhanced protection with PTFC |
£375,000 |
£value of uncrystallised funds as at 5/4/24 - across all schemes |
Primary protection no PTFC |
£375,000 |
£1,800,000 + (£1,800,000 x factor) |
Primary protection with PTFC |
£375,000 |
£1,800,000 + (£1,800,000 x factor) |
Fixed protection 2012 |
£450,000 |
£1,800,000 |
Fixed protection 2014 |
£375,000 |
£1,500,000 |
Fixed protection 2016 |
£312,500 |
£1,250,000 |
Individual protection 2014 |
25% of IP amount or £375,000 whichever lower |
IP amount or £1,500,000 which ever is lower |
Individual protection 2016 |
25% of IP amount or £312,500 whichever lower |
IP amount or £1,250,000 which ever is lower |
Pre Aday pension credit |
lower of £375,000 and (£268,275 x factor) |
£1,073,100 + (£1,073,100 x factor) |
All other enhancement factors |
£268,275 |
£1,073,100 + (£1,073,100 x factor) |
The information provided in this article is not intended to offer advice.
It is based on Quilter's interpretation of the relevant law and is correct at the date shown. While we believe this interpretation to be correct, we cannot guarantee it. Quilter cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.