61% of retirees who withdrew tax‑free cash from their pension ahead of last year’s budget say they now regret doing so.
Recent research from Quilter has highlighted the risks of making pension decisions based on Budget speculation.
Ahead of last year’s Budget, there was widespread commentary suggesting that the long-standing 25% tax-free pension lump sum could be reduced or capped. In response, some retirees chose to withdraw tax-free cash earlier than planned.
However, no change was announced in the Budget – and 61% of retirees who withdrew tax-free cash ahead of it now say they regret doing so.
For accountants and advisers, this is a timely reminder to be cautious when discussing potential tax changes with clients. Budget rumours can create uncertainty, but decisions about pensions should be based on individual circumstances, current rules and properly considered advice – not speculation.
With another Budget likely to bring further debate around tax and pensions, clear communication will be more important than ever.
