People who've taken out pension lump sum warned 'you have 30 days to return it'

James Rodger
·2-min read
People who've taken out pension lump sum warned 'you have 30 days to return it'
-Credit: (Image: Reach Publishing Services Limited)


An expert has warned savers have just 30 days to reverse a pension mistake. Savers looking to return tax-free lump sums back to their pensions may have to act quickly, it has been warned, in the wake of the Labour Party government Rachel Reeves's October Budget.

Answering a Q&A for The Times, Tom Selby from wealth management firm AJ Bell, said: “It might be possible to reverse the decision to take your tax-free cash — although you’ll need to get your skates on as, in most cases, the time limit is 30 days.

He continued: “This includes where someone accesses a personal pension for the first time.” He added: “This point is crucial — if you had already accessed your pension then the pension firm may not allow you to reverse the decision.”

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Mr Selby added: “The clock will usually start ticking from the point you receive notice of your rights, or the date you get the payment. Your cancellation rights should have been confirmed when you processed your request to access your tax-free cash, either in writing or by email. If you can’t find them, get in touch with the firm as soon as possible to find out where you stand.”

Selby responded to a query which asked: "I took my 25 per cent tax-free lump sum from my pension a few days before the budget, amid the speculation that the rules might change. It wasn’t ideal timing and I would rather have left it in there but wanted to be on the safe side in case it was abolished or reduced.

"Now that neither have materialised I am regretting the decision. A relative suggested there was a cooling-off period that would allow me to return the funds to my pension and reverse the process — is this true and how should I go about it?"

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