Rumours about Chancellor Rachel Reeves’s tax raid on pension savings in the upcoming Autumn Budget have reached “boiling point”, analysts are warning.
Specifically, reports suggest the new Labour Government is floating slashing the 25 per cent tax-free withdrawal amount attached to pension pots.
Steven Cameron, Pensions Director at Aegon, is sounding the alarm against hasty decisions as speculation mounts over potential changes to pension tax rules on October 30.
Cameron urged for “cool heads” amidst fears that some tax benefits might be withdrawn immediately following the announcement.
“Now is a time for cool heads, not heat of the moment decisions that could have a negative impact for decades to come,” Cameron stated.
He emphasised the importance of long-term retirement planning and the role of tax incentives in encouraging pension savings.
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The retirement expert’s comments come as recent polls reveal growing anxiety among pensioners, particularly women, about potential changes to pension policies.
A recent poll conducted by Skipton Building Society reveals that 70 per cent of Britons feel worried or anxious about the upcoming Budget announcement.
Women are particularly concerned, with 77 per cent expressing anxiety compared to 62 per cent of men.
Despite these concerns, men are taking more proactive steps to prepare for potential Budget changes. While 53 per cent of women haven’t taken any action, only 32 per cent of men say the same.
Some men have increased savings (15 per cent), boosted pension contributions (13 per cent), sought financial advice (12 per cent), or opened high-rate savings accounts (17 per cent) in anticipation of Budget impacts.
Financial experts advise caution and proactive planning in light of potential Budget changes.
Helen McGinty, Skipton Building Society’s head of Financial Advice Distribution, emphasises the importance of understanding one’s pension situation and seeking professional advice.
“It’s really important at any age to take the initiative, be in control, and plan ahead,” she states.
“Be aware of the decisions you are making and how they may impact your financial future.”
McGinty suggests even small increases in contributions can make a significant difference over time. “
Even just extra five pounds a month, for example, could take you a long way,” the pension expert notes.
Skipton Building Society offers free pension health checks to its members and initial consultations for pension planning to anyone looking to improve their retirement savings.
