Potential Pension Tax-Free Lump Sum Cut Sparks Concerns

Chancellor Rachel Reeves considers reducing the tax-free pension withdrawal limit in upcoming Budget, causing uncertainty among retirees.

The UK government is considering reducing the tax-free pension lump sum limit from £268,275 to £100,000, potentially affecting one in five retirees.
The proposed change aims to raise approximately £2 billion annually to address a £22 billion fiscal shortfall.
Financial advisors report a significant increase in pension withdrawal inquiries as savers react to the potential policy shift.
Experts advise caution, suggesting that any changes might include protections for those with existing entitlements to prevent retrospective impacts.
Taking pension funds prematurely could have tax implications, including inheritance tax, and may not be beneficial without a clear financial plan.