Pension savers withdrew £3.9bn in lump sums from defined contribution pensions in Q4 2024–Q3 2025, up by £868 million on the previous 12-month period, new figures show.
Lump sum withdrawals hit a peak of £1bn in both Q3 2024 and Q4 2024, around the Autumn Budget 2024. They then fell before re-peaking at £990 million in Q3 2025 ahead of the subsequent Autumn Budget 2025, according to analysis of ONS data from consultancy Broadstone.
In the UK savers can typically withdraw up to 25% of their pensions tax-free, but rumours around the Budgets suggested the Government was considering restricting that allowance to increase tax revenues.
Kelly Parsons, head of DC proposition at Broadstone, said: “This data highlights just how sensitive pension savers can be to speculation around tax and policy changes. It demonstrates the damaging and long-lasting negative impacts that rumour-mongering around pension policy and fiscal events can cause.
“Taking money from a pension is a complex and irreversible decision so it is critical that people aren’t making these important choices based on rumour or without full awareness of the consequences.”
