AJ Bell has warned the Chancellor there has been a “noticeable” change in how people are saving for their pension as there is strong fears Rachel Reeves will make tax raids during the Autumn Budget.
The investment group said they have seen a large changes in the tax free withdrawals including the amount people are contributing into their pensions over budget fears.
From the age of 55 people can currently take out 25% of their pensions up to the maximum amount of 268,275 tax free.
There are fears Labour will lower the cap to £100,000 which comes after the Fabian Society made the recommendation.
Currently pensions receive a tax relief at the current tax rate, it has been suggested Rachel Reeves could introduce a flat rate of 30% of pension relief.
AJ Bell has seen a large amount of people withdrawing their money amid fears of the changes to the tax free cap.
Chief executive Michael Summersgill said, “Amidst increased press coverage ahead of the upcoming Budget, we have seen a noticeable change in both customer contributions to pensions and tax-free cash withdrawals.
“Whilst these behavioural changes do not have a material impact on AJ Bell’s business performance, they represent significant decisions for individual customers.
“We have therefore made representations to the Treasury calling for a commitment to a pension tax lock in the Budget, guaranteeing stability in key pension tax legislation for at least this parliament.”
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