Overview
- Financial advisers say the Autumn Budget could reduce or remove the long‑standing 25% tax‑free cash allowance, though no change has been confirmed by the government.
- Some retirees are reportedly rushing to withdraw money, while other experts caution that acting on speculation risks forfeiting pensions’ tax‑favoured status.
- Under current rules, savers can take up to 25% tax‑free from each pension, with the full entitlement available at once if the pot is moved into drawdown.
- It is also possible to draw down in stages so that 25% of each withdrawal is tax‑free, and advisers highlight regular gifts from surplus pension income as an immediate inheritance‑tax mitigation.
- Experts warn that cutting tax‑free cash would reduce the appeal of pensions for long‑term saving, with the potential shift discussed alongside the planned inheritance‑tax treatment from April 2027.