Pension providers block savers from returning rushed tax-free withdrawals
Many rushed to get their pension money before Labourʼs Budget last month due to tax-free allowance cut fears. Now some providers wont let savers return their hasty withdrawals‚ even within cooling-off time
Many UK savers made quick-fire withdrawals from their tax-free pension funds before Rachel Reevesʼs Budget announcement‚ but now face issues trying to return the money
The pre-Budget rush happened because people thought the tax-free allowance might drop to £100‚000; currently its allowed to take 25% tax-free up to £268‚275. Scottish Widows and other big-name providers dont let customers cancel these withdrawals
Investment company Bestinvest saw twice as many withdrawal requests in Oct-24 compared to previous year (mostly from over-55s looking to get their tax-free part). However‚ Reeves didnt change any rules in the Budget — leaving many with un-needed early withdrawals
From 13 pension companies checked; most allow returns within 30-days but some have strict rules:
- Scottish Widows - no cancellations allowed
- Aviva - no clear cooling-off policy
- Aegon - allows returns on some products only
Shifting assets from a tax-efficient pension into a taxable environment could prove a regrettable decision for those who did so with no clear intended purpose for the cash
People who took money early (without real need) should check with their pension company fast; some might accept full-amount returns — but time is running-out
