Overview

• HMRC says it will assess cases individually and can levy unauthorised‑payment taxes on people who try to pay lump sums back.
• The potential tax hit is typically 55% and can reach about 70% where recycling rules apply, according to officials and advisers.
• The FCA reiterated that accessing tax‑free cash is not a cancellable contract, so any provider refund policies do not undo tax consequences.
• Official figures show tax‑free withdrawals rose to roughly £18.1bn in 2024/25, with advisers linking the surge to speculation about changes in the 26 November Budget.
• Wealth managers urge caution and call for clear government assurances on pension tax to prevent panic withdrawals that can irreversibly damage retirement plans.