Overview
- Rathbones estimates UK pension funds could lose around £50bn over five years if higher‑rate reliefs are replaced with a flat 25% rate, warning of weaker investment and lower retirement incomes.
- The Fabian Society is urging a cut to the maximum tax‑free cash at retirement from £268,275 to about £100,000 to make the system more progressive.
- The Institute for Fiscal Studies has outlined options such as replacing the 25% tax‑free lump sum with a taxable top‑up or reducing the existing cap to raise revenue.
- Reports suggest Chancellor Rachel Reeves may consider pension measures in November’s Budget to help close a fiscal shortfall after an OBR productivity downgrade of roughly £20bn, though no policies are confirmed.
- Financial planners and HMRC advise against hasty withdrawals based on rumours, noting any pension rule changes would likely take time to implement.