{"id":120427,"date":"2025-09-07T08:42:09","date_gmt":"2025-09-07T08:42:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/120427\/"},"modified":"2025-09-07T08:42:09","modified_gmt":"2025-09-07T08:42:09","slug":"savers-withdraw-record-18bn-from-pensions-amid-fears-over-labour-tax-charges","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/120427\/","title":{"rendered":"Savers withdraw record \u00a318bn from pensions amid fears over Labour tax charges"},"content":{"rendered":"

A staggering \u00a318.08billion was withdrawn from pension pots, a 60 per cent increase on the year before. <\/p>\n

Figures from the Financial Conduct Authority also revealed the number of savers taking 25 per cent tax-free cash jumped by 33 per cent to 111,869. <\/p>\n

Britons continue to pull their cash despite warnings from retirement experts not to make rash moves. <\/p>\n

The rate of these withdrawals was also not affected by Rachel Reeves’ decision to leave pension tax-free lump sums untouched in the last Budget. <\/p>\n

These numbers are expected to continue rising amid growing concerns about a cap being announced in the Autumn Budget on November 26. <\/p>\n

One of the most popular perks of retirement is being able to withdraw 25 per cent from your pension free of tax. <\/p>\n

The lump sums are normally used to clear mortgages and other debts before being spent on luxuries such as home renovations, new cars and holidays in retirement.<\/p>\n

Read more: Average UK house price hits new record high of \u00a3299,331 in August<\/a><\/p>\n

Read more: NS&I slammed for ‘ripping off’ savers with 1% interest accounts<\/a><\/p>\n

But the Chancellor’s failure to rule out a tightening of these rules is clearly playing on savers’ minds. <\/p>\n

“The 25 per cent tax-free cash is a treasured pension benefit and hugely important to savers,” says Emma Sterland, chief financial planning office at Evelyn Partners. <\/p>\n

“Many savers have a specific purpose in mind for their Pension Commencement Lump Sums – such as clearing outstanding mortgages, gifting to children, or a carefully thought-out income strategy – and while they ideally might not take it quite yet, they are also wrestling with the fear that if they don\u2019t it could be curtailed, and they will lose out.’<\/p>\n

Ms Sterland’s firm has seen a wave of enquires from worried financial planners ever since Labour came to power. <\/p>\n

Many financial experts have warned against the panic withdrawals, noting retirement often follows a U-shape in terms of costs – starting high, then decreasing, before ramping up again due to care expenses.<\/p>\n

But this did not stop many people from taking out their cash last year as a precautionary measure, which means they could miss out on investment growth under the tax protection of a pension in future.<\/p>\n

A Treasury spokesperson said: “We do not comment on speculation around changes to future tax outside of fiscal events.<\/p>\n

“We continue to incentivise pensions savings for their intended purpose \u2013 of funding retirement instead of them being openly used as a vehicle to transfer wealth.”<\/p>\n","protected":false},"excerpt":{"rendered":"A staggering \u00a318.08billion was withdrawn from pension pots, a 60 per cent increase on the year before. Figures…\n","protected":false},"author":2,"featured_media":120428,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":["post-120427","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/120427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=120427"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/120427\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/120428"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=120427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=120427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=120427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}