The chancellor must stamp out pension tax raid rumours ahead of next month\u2019s budget and reconsider the triple lock, an influential industry body has warned.<\/p>\n
Pensions UK, which represents retirement schemes for more than 30 million savers, wrote in an open letter to Rachel Reeves that it was concerned by reports that the tax-free lump sum allowance could be cut.<\/p>\n
The organisation said speculation alone was enough to create a \u201crush\u201d of pension withdrawals similar to those seen ahead of last year\u2019s budget.<\/p>\n
Savers aged 55 and over (rising to 57 from April 2028) can usually withdraw up to 25 per cent of their retirement savings tax-free, up to a cap of \u00a3268,275.<\/p>\n
But reports in October last year suggested that Reeves had modelled plans to cut this to \u00a3100,000. She later decided to leave the cap untouched though the government faced criticism for failing to address the rumours early enough.<\/p>\n
The Treasury has so far refused to rule out cutting the lump sum allowance again this year.<\/p>\n
Savers withdrew a record \u00a318.08 billion in tax-free lump sums in the 2024-25 tax year , a 61 per cent increase on the year prior, according to the Financial Conduct Authority, the City regulator.<\/p>\n