By GB News (Politics) | Created at 2025-03-13 14:43:54 | Updated at 2025-03-14 07:56:03
17 hours ago
Savers are facing six-week delays to access their pensions following Rachel Reeves's Budget announcement.
Pension providers are taking three times longer to release funds after being flooded with withdrawal requests.
The delays come as savers rush to dodge the Chancellor's inheritance tax raid on retirement pots.
In one extreme case, a pensioner was forced to wait for two months to receive their cash.
Before Christmas, it would typically take around two weeks from receipt of the instruction or payment request.
Now the wait has extended to nearly six weeks, according to Daniel Hough of wealth manager RBC Brewin Dolphin.
In one extreme case, a pensioner was forced to wait for two months to receive their cash
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Experts say providers appear to be prioritising withdrawals considered taxable income
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Savers can draw 25 per cent of their pension as a tax-free lump sum after reaching age 55. Any withdrawals after that are subject to income tax.
Inheritance tax is charged at 40 per cent on estates worth more than the nil-rate band of £325,000.
Homeowners leaving their main property to children can claim an extra £175,000 tax-free allowance. This means a couple can pass on £1m without incurring the charge.
Thousands more families will breach their inheritance tax allowances once pensions are included.
The Government has estimated that 10,500 families will pay inheritance tax in 2027-28 who otherwise would have avoided it.
A further 38,500 will face higher bills as a result of the changes.
Stockbrokers including Hargreaves Lansdown and AJ Bell have called on the Chancellor to reverse the inheritance tax raid on pensions.
The changes were unveiled in last year's Budget and have caused widespread concern among savers.
However, experts warn that rushing to withdraw pension funds could leave some struggling in old age.
Those who cash in their pensions now may find it difficult to cover living costs or care fees later in life.
Tom Selby, of AJ Bell said: "It's worth remembering that these are still just proposals at the moment, with any changes not due to come in until April 2027."
The Government has consulted on how to implement tax on pensions upon death.
Rachel Reeves has come under scrutiny over her policy decisions
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He added: "We do not yet know what the final rules will look like.
"In the meantime it may be best for pension savers to take a cautious and measured approach to accessing their pension, and not rushing to act."
Retirees considering withdrawals should carefully weigh immediate tax benefits against long-term financial security.
