Overview

• Official FCA figures show savers withdrew more than £70bn from pensions in 2024–25, including £18.3bn tax‑free, up 36% and 62% respectively on the prior year.
• Advisers warn against knee‑jerk cashouts based on speculation, saying panic withdrawals risk damaging long‑term retirement plans.
• ONS earnings data point to a 4.7% state pension increase next April to about £12,534 a year, bringing many closer to or into income tax because the personal allowance remains frozen at £12,570.
• The inclusion of unspent defined contribution pensions in inheritance tax from April 2027 is confirmed policy, and reported fears over possible changes to the 25% tax‑free lump sum are influencing behavior.
• AJ Bell and other voices are urging a formal pensions tax lock to calm savers ahead of the 26 November Autumn Budget.