I’m a member of the Universities Superannuation Scheme (USS) and I’m still actively contributing to the scheme. I have not taken any pension benefits, lump sums, or transfers from USS (or any other pension).

I'm trying to understand the Lump Sum Allowance (LSA) and Lump Sum and Death Benefit Allowance (LSDBA) figures shown on my 2025 USS annual statement, as they don’t seem to follow logically from my 2024 statement.

I fully understand all the figures in my 2024 statement, but I’m struggling to see how the LSA and LSDBA in the 2025 statement have been calculated. I would really appreciate any help I can get.

For reference, the relevant (rounded) figures are below.

2024 USS statement (tax year 2023/24)

  • DB annual pension: £7,678
  • DB tax-free lump sum: £23,034
  • DC total savings pot: £53,545
  • Annual Allowance used: £39,974 of £60,000
  • Standard Lifetime Allowance used: £230,436 of £1,073,100

2025 USS statement (tax year 2024/25)

  • DB annual pension: £8,738
  • DB tax-free lump sum: £26,214
  • DC total savings pot: £81,147
  • Annual Allowance used: £43,398 of £60,000
  • Lump Sum Allowance (LSA) used: £107,362 of £268,275
  • Lump Sum & Death Benefit Allowance (LSDBA) used: £107,362 of £1,073,100

Not sure if relevant, but in the 2024/25 tax year I had additional voluntary contributions (to the DC pot) of 35% from April 2024 and 40% from October 2024 to April 2025.

Edit: Voluntary contributions of 35% and 40% of my monthly gross salary into my DC pot.

  • The LSA and LSDBA figures they've provided are the value of your DB tax-free cash and your DC pot.

    parent

    Thank you! I didn't notice that, but is that the correct calculation?

    Most sources I find online say that it should be 25% of my used LTA, which can be estimated as 23 times the DB annual salary + DC pot. According to that, it should be:

    Used LTA = £8,738 x 23 + £81,147 = £282,121

    So it should be LSA and LSDBA = 25% of £282,121 = £70,530 ?

    parent root

    The LTA would only be relevant for your LSA if you'd accessed your pension before the rules changed, so it doesn't matter here.

    For most people only 25% of the DC pot would count towards the LSA, so do you have the option to take this entirely tax free at retirement?

    parent root

    My understanding (before the changes) is that only up to 25% of the DC pot could be taken tax-free, so I would be surprised that they now allow taking all of it tax-free.

    If I keep my additional voluntary contributions at the current level, it will take me a few years to reach the LSA limit. What would happen when the used LSA value reaches (and eventually exceeds) the limit? I guess it would stay at the £268,275 limit, meaning that any amount I take above it when I retire will be taxable?

    parent root

    When you've used up your LSA you're not able to take any further tax-free cash (except for the likes of things falling under the small pots rule).

    I think the USS have got their figures wrong, if you can only take 25% of the DC pot tax-free then that's what should count towards the LSA.

    parent root

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    parent