Many individuals determined higher protected than sorry and took tax-free money earlier than final 12 months’s Finances in case of a raid on their hard-earned pension financial savings.
Now fears are igniting once more as Chancellor Rachel Reeves prepares what is predicted to be one other tax-raising Finances, scheduled for 26 November.
So, did you make the leap and dip into YOUR pension after the election in July, however earlier than the Finances in 2024?
For those who took your tax-free money final summer season or autumn, we wish to hear from you.
How a lot did you’re taking, when, and why? What did you do with the cash, and the way do you are feeling about your resolution now?
Inform us your story – whether or not you are feeling it was value it, or when you have regrets now – at editor@thisismoney.co.uk.
Within the occasion, Reeves left tax-free money alone within the 2024 Finances, however introduced plans to carry pensions into the inheritance tax web from 2027.
This 12 months, regardless of requires Reeves to allay issues now if she is NOT going to slash the boundaries on tax-free money, she is conserving her intentions to herself.
Pension corporations warn of a repeat of the regrets suffered by savers final 12 months, when many acted on hypothesis and pulled out lump sums, however then discovered Rachel Reeves didn’t regulate the restrict within the Finances.
Monetary suppliers and advisers are at present experiencing a rush of enquiries from involved shoppers just like final summer season.
They warn the choice to take 25 per cent tax-free money shall be irreversible, after HMRC and the Monetary Conduct Authority clarified the principles on cancellations lately.
There are good causes to take your tax free lump sum now, if you’re over 55 and deliberate to take action anyway, or have the cash earmarked for one thing vital or pricey to your coronary heart.
Folks usually use the cash to clear mortgages or different money owed, which could be a wise monetary transfer as you begin retirement, or fulfil cherished plans for a house makeover or a dream vacation.
However pension specialists warn you may miss out on useful funding development beneath the tax safety of a pension in future – particularly for those who simply stick the cash in a present or financial savings account.
Learn extra right here: How does pension tax free cash work, and must you take it now?
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