£102.3 billion withdrawn flexibly from pension pots since 2015

Pressures driving early withdrawals
Changes to Inheritance Tax (IHT) rules have also affected early pension withdrawals. From April 2027, defined contribution pension pots will be counted in IHT calculations. This upcoming change has led some savers to prioritise spending their pension funds rather than leaving an inheritance.

However, withdrawing pension funds early carries significant consequences. Savers must carefully consider how this might impact their future financial security and the sustainability of their retirement income.

Seeking the right professional advice
Navigating decisions about when to access pension savings can be complex, as it involves weighing various financial, personal and long-term factors. Seeking professional advice is essential, as it provides a clearer understanding of the available options and helps individuals make informed decisions that align with their unique goals and circumstances.

For those considering withdrawing money from their pension before reaching retirement age, it’s crucial to understand the full consequences. Accessing pension
savings early can result in significant outcomes, such as potential tax charges, a reduced retirement income and an impact on long-term financial security.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. The value of your investments can go down as well as up, and you may get back less than you invested.

A pension is a long-term investment not normally accessible until age 55 (57 from april 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.