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Clients topping up and withdrawing from pensions ahead of Budget

ended 18. October 2024

A wealth manager on the Newspage News Desk has said, ahead of the Autumn Budget, he has some clients rushing to withdraw from their pensions at the same time as others are rushing to top up their pensions. Have you experienced the same, what are you advising clients currently and do you feel all the leaks and statements from the Govt ahead of the Budget have the potential to cause people to make potentially rash decisions? Any thoughts, whizz them across before 10am.

4 responses from the Newspage community

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Faisal Sheikh
Managing Director at Monmouth Capital
Many people are concerned that if they don't take the full tax-free cash allowance now, currently £268k, it could drop to £100k in the Budget. For those that planned to take it anyway in the next few months, there's no harm in withdrawing it before 30th October. Yet sometimes the very same people also plan to contribute more to their pension as soon as they can. In this case there are two concerns: a drop in the annual allowance; and a reduction in the tax relief available, currently up to 45% for top rate taxpayers. To be clear, we have no idea if any of these changes will come to pass. So it's really important people only act if they had reasonable plans to do so anyway.
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Anita Wright
Independent Financial Adviser at Ribble Wealth Management
While I’ve had two clients asking me about tax-free cash rumours and three others wanting to know how much they can pay into their pensions before October, I’ve concluded that it’s impossible to make any firm plans until we know exactly what the changes will be. I’ve been advising my clients to stay put and avoid knee-jerk reactions based on speculative information. There are always pre-Budget leaks and statements, but the key message I’m sharing is to maintain a long-term perspective. Reacting out of fear of possible changes can lead to missed opportunities or unnecessary tax exposure. Ultimately, I’m reminding my clients that their financial goals should guide their pension strategy, not short-term political noise.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
We're advising clients not to make rash decisions. We can't plan based on ifs, buts and maybes. Taking money out of a pension can have irreversible consequences so it's key that these are understood and weighed up before people do anything.
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Philip Dragoumis
Director and Owner at Thera Wealth Management
All of our clients have been topping up their pensions now rather than early next year on our advice. They have also been selling any direct holdings outside tax wrappers that they were meaning to sell anyway in order, for example, to fund their ISAs and pensions. It makes perfect sense to take these actions ahead of the Budget. Removing tax-free cash, however, does not and none of our clients have done this. The negative tax consequences of removing funds from the pension wrapper if there is no need to are material. We would not advise this.