Money sat in pension funds is invested in the stock exchange and tangible assets. It isn’t just left in a money box doing nothing. When the previous labour chancellor indicated her intentions there was an exodus from the funds as those approaching pension, age by taking out the cash lump sum.
Guess what!?
Savers are even more alarmed at what may be coming down the road.
Over the past 2 years over £40bn was taken out. Now to give some sort of perspective the fund that I look at at County Hall is the ‘Border to Coast Fund’ which consists of 8 local authorities combined assets and cash. That fund is worth approximately £32bn.
In 2024 £18bn was removed, in 2025 £22bn was removed. The 25% you can currently withdraw as a tax free lump is being looked at by Labour as a potential tax raid.
The issue is that there is less money that can be invested in companies to help them grow and of course less money in the pension fund making them less viable, at which point pension contributions for members will have to go up.