Worried savers are rushing to take money out of their pensions amid growing fears that Rachel Reeves could target retirement funds in her upcoming Budget.
The rush stems from widespread anxiety that the chancellor may reduce the generous tax-free withdrawal limits currently available to pensioners.
Faye Church, a wealth manager at Rathbones, described "heightened anxiety among clients" resulting in increased "volume and complexity of queries" in recent days.
The panic has intensified over the past week following the Chancellor's statement that individuals with the "broadest shoulders" ought to increase their contributions to government coffers, prompting fears of imminent changes to pension taxation rules.
Some savers are already taking money out early to gift to family or buy second homes, according to Andrew Tricker from Lubbock Fine Wealth Management.
Ian Futcher, a financial planner at Quilter, revealed that customers have been enquiring about accessing pension money to meet rising private education costs.
School fees have increased following the Chancellor's announcement that independent schools will face a 20 per cent VAT charge.
Jason Holland of Evelyn Partners confirmed that potential pension taxation changes have become "one of the main topics that is coming up in discussion" during client consultations.
The variety of withdrawal motivations reflects broader concerns about protecting accumulated wealth before any potential legislative changes take effect.
Pension savers warned of 'long-term damage' as £70billion drained from retirement pots | GETTYFinancial Conduct Authority figures show that retirement savers withdrew £70billion from their pensions in 2024-25, up from £52billion the previous year.
Data from Interactive Investor shows an even sharper increase, with the value of tax-free pension withdrawals rising by 112 per cent this year.
The figures highlight growing concern among savers, many of whom are choosing to access their funds early amid fears of future rule changes.
The sharp rise suggests uncertainty around the current system, which allows retirees aged 55 and over to take up to 25 per cent of their pension savings tax-free, up to a maximum of £268,275.
Mr Bell proposed reducing the tax-free allowance to £40,000, a move he said could raise £2billion a year for the Treasury
| GETTYConcerns have grown following Ms Reeves’s recent comments on wealth distribution, while the appointment of Torsten Bell as pensions minister has added to savers’ unease.
During his time at the Resolution Foundation, Mr Bell proposed reducing the tax-free allowance to £40,000, a move he said could raise £2billion a year for the Treasury.
Andrew Tricker noted that last year's Budget alterations to inheritance tax regulations, which subjected unused pension funds to 40 per cent taxation on estates exceeding £325,000, had shattered the perception that retirement savings were "sacrosanct".
"It's certainly shifted the dial in terms of what the Government is capable of doing," Tricker observed, explaining why affluent clients have become particularly anxious about protecting their accumulated pension wealth.
Steven Cameron from Aegon emphasised that "making decisions based on speculation can be dangerous"
| GETTYFinancial experts are cautioning against precipitous action driven by Budget speculation. Jon Greer, head of retirement policy at Quilter, warned that "decisions like taking your tax-free lump sum are irreversible" and highlighted how uncertainty creates "real anxiety for people".
Steven Cameron from Aegon emphasised that "making decisions based on speculation can be dangerous", noting that premature withdrawals forfeit the advantageous tax treatment of pension savings.
Mike Ambery, pension and savings director at Standard Life, cautioned that "acting on speculation can lead to unintended consequences such as missing out on future investment growth".
A HM Treasury spokesman said: "We do not comment on speculation around tax changes but remain committed to encouraging pension saving. Pension savers already benefit from around £78bn a year in tax reliefs, as the majority pay no tax on their contributions."