Withdrawal symptoms

FIVE-MINUTE GUIDE TO... CASHING IN YOUR PENSION

- By Harvey Jones

WITH Chancellor Rachel Reeves widely expected to hike taxes again in her Autumn Budget, speculation is mounting over whether she will target our pension savings.

One potential change is to the pensions tax-free lump sum — the portion of your pension pot you can withdraw without paying income tax.

At the moment, this stands at 25% of your pot, up to a maximum of £268,275. But some experts believe this could be slashed to £100,000, or even less.

Robert Salter, director at accountancy group Blick Rothenberg, said it's an obvious way to raise extra revenue.

"Reeves could limit its value to as little as £75,000."

Those with total pension savings below £300,000 wouldn't be affected, but those with larger pots may be tempted to take evasive action.

However, they should tread carefully. Similar rumours circulated before the last Budget in October, but Reeves left the allowance untouched. Many who rushed to take their tax-free cash ahead of time later regretted it.