Surge in UK Pension Withdrawals Amid Budget Fears

British wealth managers report increased withdrawals from pensions as citizens fear changes in tax advantages before the upcoming budget. Speculation surrounds potential reductions in tax-free benefits, prompting a spike in withdrawals to secure funds under current rules. The situation highlights concerns about fiscal policies affecting savers.

In anticipation of the upcoming budget, British pension holders are reportedly making a beeline to withdraw their funds. The trend comes amid speculation that tax advantages currently enjoyed may be curtailed. Finance experts warn that this fiscal policy change could predominantly impact affluent savers.

Major wealth managers, including industry giants like Schroders and Aberdeen, have observed a notable increase in clients withdrawing tax-free lump sums. The fiscal apprehension has been cited as a primary reason for this surge, with some companies experiencing up to a 300% spike in withdrawal requests.

Despite the uncertainty, the situation underscores broader concerns about the sustainability of current fiscal strategies. The Institute for Fiscal Studies also notes that tax-free withdrawals heavily favor the wealthy, leading to significant costs for the exchequer. Meanwhile, the British finance ministry remains tight-lipped about potential changes.

(With inputs from agencies.)