The total value withdrawn from pension pots increased by 21.7% to £91.2bn in the year ending 31 March 2026, up from £74.9bn in 2024-25, show latest figures from the Financial Conduct Authority (FCA). What is most stark is this number is up 70% on the 2023-24 figure of £53.6bn.

Tax free cash withdrawals hit £22bn in 2025-26, up from £18.3bn the previous year, and double the amount withdrawn over the previous two-year period.

Changes to inheritance tax (IHT) with pension pots drawn into the 40% net are spurring savers to make earlier decisions about their withdrawals, with the tax free nature of the excess funds going to be taxed from next April, just six months away. Meantime owner managed businesses and farms also lost their IHT tax breaks to a great extent due to changes to business and agricultural property relief (BPR/APR).