These case studies are for financial advisers only. They must not be distributed to, or relied on by, customers. They are based on our understanding of legislation as at 13 August 2026.
You can read about how Enhanced Protection (EP) and the LSA and LSDBA works in the Protection and enhancement of allowances page of our LSA and LSDBA guide.
These case studies look at how Enhanced Protection impacts an individual's LSA and LSDBA when they do, or do not, have registered PCLS.
Case studies
EP with no registered PCLS and no pre-6 April 2024 BCEs
Josh is looking to take benefits from his uncrystallised funds of £460,000, including 25% PCLS, in August 2026.
He has EP, doesn’t have registered PCLS and has no pre-6 April 2024 BCEs. This means his allowances are:
LSA - £375,000
LSDBA – Value of his uncrystallised rights on 5 April 2024, which was £1,400,000
In this case, the calculation is simply £460,000 x 25% = £115,000, which will then be deducted from both his LSA and LSDBA leaving the figures as:
LSA £375,000 - £115,000 = £260,000
LSDBA £1,400,00 - £115,00 = £1,285,000
EP with no registered PCLS and pre-6 April 2024 BCE
Claudia has EP and a SIPP from which she is looking to take benefits in September 2026 and needs to calculate whether she will be able to get 25% PCLS from her fund, which currently stands at £960,000.
In October 2022 she had a BCE of £600,000, taking 25% PCLS.
LSDBA is the value of uncrystallised rights on 5 April 2024, which was £800,000
LSA is £375,000 – £150,000 ‘lifetime allowance previously used amount’ (25% of the £600,000 BCE, using the standard transitional calculation) = £225,000
In this case, if Claudia crystallised the rest of her fund, 25% PCLS would amount to £960,000 x 25% = £240,000.
She would not have enough remaining LSA to take the full 25%. The excess above her remaining £225,000 LSA can be designated to drawdown, used to buy an annuity or perhaps be paid as a taxable Pension Commencement Excess Lump Sum (PCELS), if the conditions are met and the scheme rules allow.
You can read more about PCELS on this page of the Pensions Tax Manual.
EP with registered PCLS of more than £375,000
Toby has EP and his certificate shows the PCLS percentage as 32%. He is looking to take benefits from uncrystallised funds of £1,500,000 in the next few weeks.
The value of this arrangement was £1,300,000 on 6 April 2023. He’s had one previous PCLS payment of £100,000 in November 2023.
His permitted maximum PCLS is the lower of:
- 32% of £1,500,000 = £480,000 and
- 32% of £1,300,000 = £416,000 - £100,000 = £316,000
So, the maximum PCLS that can be paid is £316,000
Anyone with EP and registered PCLS doesn’t need to have LSA remaining to take their registered tax-free cash, but they must have available LSDBA.
EP with registered tax-free cash and pre-5 April 2023 BCE
Donna has EP, with registered PCLS, and a SIPP with a current value of £600,000. She is looking to take the maximum amount of tax-free cash available and designate the residual fund to drawdown.
Donna previously took a tax-free cash payment of £250,000 in March 2021.
The EP certificate shows the PCLS percentage as 29% and the value of the SIPP on 6 April 2023 was £500,000.
Donna’s permitted maximum PCLS is the lower of:
- 29% of £600,000 = £174,000, and
- 29% of £500,000 = £145,000
The maximum PCLS is £145,000. The pre-5 April 2023 BCE is a bit of a red herring because only PCLS payments made after that date would be deducted from the calculation so the £250,000 payment from March 2021 doesn’t reduce the PCLS that can be paid now.