Experts share 7 costly mistakes pensioners should avoid before the Budget
Pensioners are being warned against making rushed financial decisions ahead of next week's Autumn Budget. Chancellor John Healey is set to deliver his first Budget under Prime Minister Andy Burnham on Wednesday, October 28. Among the issues attracting attention are possible changes to tax-free pension withdrawals and the treatment of inherited wealth, although no further restrictions on pension lump sums have been confirmed.
TL;DR
- Avoid rushing to withdraw tax-free pension cash due to speculation about potential cuts to the 25% tax-free lump sum allowance.
- Do not give away money to family in a panic, as gifts may still be subject to inheritance tax if made within seven years.
- Refrain from rewriting your will based solely on rumors, as proposed changes may not materialize, leading to unnecessary costs.
- Do not rush into equity release schemes; these decisions should be based on personal needs and professional advice, not budget speculation.
- Be cautious about using pension cash to clear debts without calculating the full tax implications, as large withdrawals can push you into a higher tax band.
- Be vigilant against scammers who may exploit fears about budget changes to pressure people into transferring retirement savings.
- Focus on conducting essential financial checks now, such as tracking old pension pots, reviewing investments, and checking monthly spending, rather than speculating on budget outcomes.