LSA Reduction

MorganL · September 6

Hi,

I have received information from a provider that has reference to BCE 6 & 1 on the same day prior to April 2024. One of them is payment of PCLS and the other is funds moved to drawdown however the LSA has been reduced by c.25% of each of those amounts. Is this correct?

is the LSA is reduced when funds are designated to drawdown?

Thanks!

les_cameron · September 6

Yes.

The LSA is initially reduced by 25% of the LTA used at 5th April 2024.

So they need to included all LTA used not just the LTA used by tax free amounts (though there are changes afoot to exclude the age 75 LTA usage.)

Everything you need to know is here - https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/benefit-limits/lump-sum-allowance

LSA Reduction

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