Don't panic over pensions

RUMOURS that Chancellor Rachel Reeves will cut the 25% tax-free lump sum in next month's Budget are driving a surge of pension withdrawals, but many could regret their haste if she doesn't follow through.

- By Harvey Jones

PANIC: Reeves Picture: GETTY

(GETTY)

Experts warn that some could land themselves with a painful tax charge if they try to put the money straight back into their pension after regretting taking it out.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, is seeing signs of panic as savers scramble to beat potential Budget changes: “Some people will have a plan for that cash, say, to pay off a mortgage or carry out home renovations, but others will be doing it as a knee-jerk reaction, and this comes with risk.”