There has been an increase in withdrawal requests after the Chancellor announced that pension pots would no longer be exempt from inheritance tax (IHT) as of April 2027.
Daniel Hough, financial planner at wealth manager RBC Brewin Dolphin, said: “There are widespread delays for people looking to withdraw money from their pensions, because providers have been inundated with requests since October’s Budget.
It comes following October’s Budget where Reeves said pensions were being brought within individuals’ estates for IHT purposes, from 6 April, 2027.
Chris Ball, chief executive at the independent financial advisory firm Hoxton Wealth, said: “Following the recent Budget, we’ve seen a surge in pension enquiries, particularly from those accessing their retirement funds.
Inheritance tax is charged at 40 per cent on the value of an estate worth more than £325,000.
However, many will go over the allowance once pensions are included.
“With pensions set to be included in estates for inheritance tax purposes from 2027, it’s understandable that many savers are re-evaluating their options.”
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Rob Morgan, chief investment analyst at Charles Stanley, said: “It is important people give serious thought to pension withdrawals and carefully think through the consequences. Taking money out is usually a one-off decision that cannot be reversed.
“That’s especially the case because the proposed rules, if they are enacted in full, do not start until April 2027. The details are not yet known in full. Rather than rush into a decision, pension savers have time to weigh things up.”
Hough said: “Ultimately, you only have so much control over how long it takes to access your pension – it is entirely dependent on how quickly the pension provider can operate.
He said providers seem to be prioritising requests for withdrawals that would be considered taxable income, given the importance of that falling into one tax year or another.
“Whether your pension provider is large or small, the delays are the same across the board. If you submit instructions, be prepared for the fact that it might take four or five weeks to complete, and speak to your financial adviser about the knock-on effect this may have for your financial situation in the coming months.”
Jon Greer, head of retirement policy at Quilter, said: “As we near the end of the tax year, we often see an influx of people looking to make various financial decisions, including accessing pension funds.
“These deadlines are set out to give utmost assurance to customers that their money will be with them in time. Some transactions will happen more quickly than others, for example, where the amounts to withdraw don’t require assets to be sold because there’s sufficient cash available.”
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