Almost three in five (59 per cent) people are concerned about potential changes to pension tax-free cash in next month’s Autumn Budget, according to research from Nucleus.

The findings come amid ongoing speculation that the government could reduce the 25 per cent tax-free lump sum entitlement currently available to savers from age 55, capped at £268,275.

Just over a quarter (28 per cent) of respondents said they were unconcerned by the rumours, while 13 per cent said they did not know.

The speculation has intensified in recent weeks, ahead of the 26 November Budget, with fears that the Treasury could target the pension tax-free allowance as part of efforts to raise revenue.

Nucleus technical services director, Andrew Tully, warned that the uncertainty was creating unnecessary anxiety among savers and risked prompting hasty financial decisions.

“For the second year in a row, the UK faces a lengthy run-up to the Autumn Budget,” he said.

“This extended period allows the rumour mill to churn, given the government hasn’t clarified its position.

Tully highlighted that last year’s speculation of potential changes to tax-free rules led many investors to take lump sums from their pensions, with some attempting to reverse those actions when no such rule change materialised.

"There’s a real sense of déjà vu here,” he added, stressing that long-term planning needs certainty, as speculation can harm confidence and lead to potentially self-destructive behaviours."

"Ideally, the government will confirm there will be no change to tax-free cash, at least in this Budget or for this parliament, which will give people the ability to plan for their retirement with more confidence,” Tully said.

The latest findings follow Financial Conduct Authority (FCA) data showing a 29 per cent increase in people taking only tax-free cash from their pensions during 2024/25 compared to 2023/24, suggesting that last year’s Budget rumours had already influenced saver behaviour.

Indeed, pension providers and industry experts have repeatedly warned that persistent speculation over tax-free cash reforms risks undermining saver confidence and destabilising retirement planning.

These fears have prompted AJ Bell to launch a new parliamentary petition calling on the government to commit to a ‘pension tax lock’, which would guarantee the preservation of key pension tax incentives, including tax-free cash and pension tax relief, for the duration of the current parliament.

Meanwhile, Pensions UK has argued that the Pensions Commission could offer an opportunity to end the cycle of damaging tax speculation by creating a long-term plan to ensure the pension system remains appropriately incentivised.

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