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Pension tax fears push Britons to withdraw £22billion from retirement savings ahead of Budget

gbnews.com · 7h · first reportShare

Retirees rushed to take tax-free cash from their pensions last year, withdrawing £22.1billion in lump sums amid fears the Treasury would slash the allowance. New figures from the Financial Conduct Authority (FCA) show tax-free withdrawals jumped by more than a fifth in the year to March 2026. That follows a 63 per cent surge the previous year, to £18.3billion. Total pension withdrawals hit a record £91.2billion, up 22 per cent, even though the number of pension pots accessed for the first time rose by only seven per cent. The period covers the run-up to Rachel Reeves's second Budget in November 2025, when there was intense speculation that the then-Chancellor would cut the 25 per cent tax-free entitlement, capped at £268,275. In the end, the allowance was left untouched, but pension savings are set to become liable for inheritance tax (IHT) from next April. Jemma Slingo, pensions and investment specialist at Fidelity International, said: "People worried the Treasury would cut the amoun