Overview

• FCA figures show £18.08bn taken as tax‑free cash in the last financial year, with the number of 25% withdrawals up 33% to 111,869.
• The pace of withdrawals has stayed elevated as speculation over a tighter cap persists ahead of the 26 November Budget, though no change is confirmed.
• Current rules allow 25% tax‑free up to £268,275, while reports have floated a £100,000 cap that the IFS estimates could raise about £2bn a year if introduced.
• HMRC’s emergency PAYE treatment often over‑taxes first flexible withdrawals; experts say taking £1–£100 initially can prompt the correct code, though some may still need to reclaim.
• Over‑55s reclaimed about £44m in excess tax in Q1 2025 across more than 15,000 claims, and advisers warn against rushing permanent decisions based on Budget rumors.