Overview

• Current rules let savers take 25% of their pension tax-free up to £268,275, and officials are modelling caps ranging from about £100,000 to £40,000.
• A £100,000 ceiling could raise roughly £2bn a year once fully in effect, according to the Institute for Fiscal Studies.
• A Whitehall source says pension reform is not being prioritised and considers such a change unlikely, despite its inclusion on options lists.
• Providers warn renewed speculation may trigger pre‑emptive withdrawals that blunt short‑term receipts, echoing last year’s spike reported by platforms such as AJ Bell and Interactive Investor.
• The measure is being assessed alongside ideas like taxing gains on high‑value home sales and tightening inheritance rules as Reeves confronts a forecast £40–50bn fiscal gap.