There has been a scramble to take cash from pensions and beat an impending inheritance tax raid by the Treasury with many also fearing for the future of the tax-free lump sum.
Between April 2024 and March 2025, 211,000 savers took their 25 per cent tax-free lump sum from their pension, a jump of almost a third on the year before.
They withdrew a total of £18.1 billion, up from £11.25 billion the previous year, according to figures obtained from the Financial Conduct Authority, the City watchdog, by the wealth manager Evelyn Partners.
The surge coincided with the announcement in last year’s budget in October that most pensions would be included in an estate for inheritance tax purposes from April 2027 (although anything left to a spouse or civil partner will remain exempt). In the first year of the changes, the government estimates that 213,000 estates will have inheritable pension wealth.
Nearly £10.5 billion was withdrawn between last October and this March after the plans were revealed, compared with £6 billion over the same period the year before.
