Pension savers rushed to withdraw their 25% tax-free cash in the 2024/25 financial year, according to new FCA data.

Figures obtained by Financial Planner Evelyn Partners showed a surge in the number and amount of Pension Commencement Lump Sums (PCSL) accessed in the year from April 2024.

The data showed the total amount taken as PCLS by all savers in the six months up to and including March this year was £10.43bn.

That was up 36.5% on the £7.65bn taken in the preceding six months, and a 72% increase on the £6.07bn taken in the six months to March 2024.

The total amount withdrawn in the 2024/25 financial year at £18.08bn was 60.7% higher than the £11.25bn extracted in 2023/24, according to the data.

The number of savers withdrawing their PCLS in the six months up to and including March surged by 33% to 111,869 compared to the same period a year earlier. The number across the 2024/25 tax year climbed by 29.1% compared to 2023/24.

Emma Sterland, chief Financial Planning officer at Evelyn Partners, said: “These are quite startling figures showing that the country’s pension savers have been in an unprecedented rush to take their tax-free lump sums.

“It seems certain some of this was prompted by changes, both actual and feared, to Government policy on the taxation of pensions, as well pressures such as the cost of living and higher interest rates.”

She said some of the increase in the six months up to April this year will be down to families reacting to the inclusion of unspent pension assets in inheritance tax calculations from April 2027, which was announced at the Chancellor’s first Budget on last October.

Ms Sterland said: “The fact that PCLS withdrawals were already surging rapidly in the summer of 2024, and the sheer volume since then, suggests strongly that there is another factor at play – the fear that the Government would cut tax-free cash in some way at the last Budget, and might still do so at the next. This is backed up by our conversations with clients.”