Pensioners raid savings to beat Budget tax grab

PENSION savers are cashing in their pots at record levels as they scramble to escape Labour's inheritance tax raid on unused pensions and a possible further grab by Chancellor Rachel Reeves in the Autumn Budget.

- By Harvey Jones

Savers withdrew £70.9billion from pensions in 2024/25, a jump of more than 36% on the £52.2bn taken the previous year, according to figures from the Financial Conduct Authority.

Almost 962,000 pension plans were accessed for the first time, up 8.6% on 2023/24, while the average amount taken also climbed sharply.

Experts blame two factors. First, in last year’s Budget Reeves announced that unspent defined contribution pension pots will be liable for inheritance tax from April 2027. Families have started taking evasive action today by extracting cash early, often to gift to children before it is caught by the taxman.