Anyone aged 55 and over issued £100,000 pension warning amid rule change

Pension savers have been warned the tax-free pension lump sum could be REDUCED by the Labour Party government at the Autumn Statement and Budget. Pension savers are rushing to withdraw tax-free lump sums amid speculation of potential Budget changes from Chancellor Rachel Reeves.

Currently, savers aged 55 and over can withdraw 25 per cent of their pension pot tax-free, however, a think tank is urging Rachel Reeves to reduce this limit to £100,000. David Kindness, personal finance and tax expert at Best Money, told GB NEWS: "A potential change that could impact retirees is a reduction in the tax-free lump sum that can be withdrawn from pensions.

"Currently set at 25 per cent, there are discussions about lowering this percentage. This could significantly affect those who have based their retirement plans on the existing rules, particularly public sector employees with defined benefit pensions.

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"It's a change that could force many to rethink their retirement income strategies." David Gibb, a chartered financial planner at Quilter Cheviot said: "All our colleagues are getting calls and emails daily from people wondering about taking their tax free-lump sum. They're saying things like 'it feels like all I speak about'. There's a lot of worry from clients as there's much confusion and panic."

Mike Ambery, retirement savings director at Standard Life, said: "Our message to customers looking to act ahead of potential changes is that whatever decision they choose to make, they need to be happy that it will be the right thing for them to have done, whatever the outcome of the Budget."

Arthur Favier, CEO of Oppizi, said: "If pension relief gets reduced or restructured, it could lead to significant shifts in how people save for retirement." Helen Morrissey of Hargreaves Lansdown said: "Ripping this out of your pension now to avoid a tax grab may seem like a good idea, but it's something you may come to regret."

A Treasury spokesman stated: "We do not comment on speculation around tax changes outside of fiscal events."