UK pension savers withdrew a record £10.4bn from their pensions using their tax-free cash allowance in the six months to the end of March, according to Financial Conduct Authority data.
The figure marked an increase of more than a third on the preceding six-month period, and was 72% more than in the six months to the end of March 2024.
More than 111,000 people accessed their lump sum in the six months to the end of March 2025, the data showed.
The data comes from a freedom of information request by wealth management company Evelyn Partners. In total, £18.1bn was accessed in the 2024-25 financial year, up from £11.3bn in the 2023-24 period – an increase of more than 60% – while the number of people accessing their lump sum rose by 29% year-on-year.
The information reflects growing concerns about potential tax changes related to pensions, including changes to tax relief and a potential restriction of the pension commencement lump sum.
Emma Sterland, chief financial planning officer at Evelyn Partners, said the “extraordinary” increase was also likely influenced by higher interest rates and inflation, as well as the decision to include unspent pension assets in inheritance tax planning.
She added: “Some of the increase in the six months up to April 2025 will likely be down to families reacting to the inclusion of unspent pension assets in inheritance tax calculations from April 2027, which was announced at the chancellor’s first Budget on 30 October 2024.
“But the fact that lump sum withdrawals were already surging rapidly in the summer of 2024, and the sheer volume since then, suggests strongly that there is another factor at play – the fear that the government would cut tax-free cash in some way at the last Budget, and might still do so at the next.”
She said some of the firm’s clients had expressed this concern.
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“While some savers and retirees will doubtless have taken their tax-free cash as part of a well-thought-out plan, you can’t help feeling that much of this increase is a slightly panicked dive into pensions sparked by uncertainty over policy change,” Sterland said.
The tax-free lump sum is limited to 25% of an individual’s pension savings or £268,275.
Any changes to this, Sterland said, may feel like “the goalposts are being moved as they’re halfway down the pitch”. She also indicated that it may harm pension saving just at the time the government has launched the Pensions Commission to explore ways to improve retirement income adequacy.
