Overview
- Treasury officials confirmed the 25% tax-free pension cash entitlement remains unchanged, with most savers able to withdraw up to £268,275 from age 55.
- Reporting indicates the government is considering capping the National Insurance break on workplace salary-sacrifice contributions at £2,000 per employee per year, which analysts say could cost a typical worker about £210 annually.
- Speculation over cuts prompted elevated withdrawals, with data cited in coverage showing more than £70bn taken from pensions in 2024/25 and firms reporting spikes, including a 33% jump in requests at Bestinvest and a threefold increase at Arbuthnot Latham.
- AJ Bell’s modelling suggests a £2,000 cap could materially dent future retirement pots, with a 35-year-old earning £100,000 potentially ending up about £49,682 worse off by age 65.
- Advisers caution against precautionary cash-outs that can trigger pension recycling tax charges, and HMRC separately apologised as it reviews roughly 23,500 incorrectly suspended child benefit cases.