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Pension warning as savers rush to access their money before death tax changes
The FCA said first-time access to pension plans rose 7.4% to more than 1 million as savers moved money ahead of tax changes.
- The FCA reports total pension withdrawals increased 21.7% in 2025/26, while the number of pension plans accessed for the first time rose 7.4% to more than one million.
- Sir Steve Webb, partner at LCP, attributes the surge to fears over potential tax changes, including speculation regarding Autumn Budgets and the planned introduction of IHT from April 2027.
- The number of individuals with savings worth £250,000 or more entering drawdown more than doubled, rising from 34,712 to 75,968, revealing the biggest shift involves larger pension pots.
- Sir Steve said, "It is very worrying that uncertainties about government policy on tax and pensions seems to have driven very high levels of withdrawals," urging stability.
- From April 6, 2027, the Government's IHT changes take effect, bringing most unused pension funds into inheritance tax scope; experts warn premature withdrawals may jeopardize long-term investment growth.
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