UK pension savers rushed to withdraw £18.1 billion between April 2023 and March 2024 amid fears of tax hikes on retirement funds.
Pension Withdrawals Surge
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211,000 savers took their 25% tax-free lump sum.
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Withdrawals rose by nearly a third compared to the previous year.
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The rush followed the October budget announcement that pensions will be included in inheritance tax from April 2027.
Why the Panic?
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Government estimates show 213,000 estates could face inheritance tax by 2027-28.
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Concerns also grew that the tax-free lump sum could be reduced in future budgets.
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Many savers used the cash to clear mortgages, support children, or build retirement income strategies.
Expert Warning
Advisers caution against making decisions based on speculation. Taking money early may move savings into taxable accounts and weaken long-term retirement plans.
Pension Options
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Defined benefit schemes offer a set income, with or without a lump sum.
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Defined contribution pensions give more flexibility, including annuities, drawdown, or staged withdrawals.
