The majority of Brits are worried about rumoured changes to pension tax-free cash rules in the upcoming Autumn Budget, new research shows.
Three in five (59%) people said they are concerned about the changes, research by Nucleus has found. That’s twice the number of people who said they are not concerned (28%), while just 13% said they didn’t know.
It comes amid ongoing speculation that the amount of tax-free cash available from pensions will be cut in the Budget on 26 November.
Under current UK rules, those aged 55 and above can normally take up to 25% of the value of their pension tax-free, up to a maximum of £268,275.
Rumours suggest that the chancellor is eyeing up reducing this amount as she looks to fill a suggested £30bn “black hole” in the public purse.
There were similar rumuors ahead of the Autumn Budget last year, and nothing came to fruition – but data from the Financial Conduct Authority shows there was a 29% increase in people taking tax-free cash from their pension during 2024/25 compared to 2023/24.
Experts say that increase is likely to have been driven by this speculation, and a number of firms have reported that clients are currently asking about taking their tax-free cash ahead of this year’s Budget for the same reason.
Andrew Tully, technical services director at Nucleus, said: “For the second year in a row, the UK faces a lengthy run-up to the Autumn budget.
“This extended period allows the rumour mill to churn given the Government hasn’t clarified its position.
“Last year’s speculation of potential changes to tax-free rules saw many investors take lump sums from their pensions, with some trying to reverse those actions when no such rule change materialised. There’s a real sense of déjà vu here.”
He added that ideally the government will confirm there will be no change to tax-free cash, but that in the meantime, speculation is damaging for consumer confidence.
“Long-term planning needs certainty. Speculation can harm confidence and lead to potentially self-destructive behaviours.”
