Cash Savings Surge: Savers Shun Pensions Amidst Uncertainty
An increasing number of savers are opting to keep a portion of their retirement funds in cash due to uncertainty surrounding the future of pensions. This trend has been observed by Chase, which has seen a 25% rise in cash savings account openings compared to last year.
Chase reports that 39% of its customers are now incorporating cash savings into their retirement planning. This shift comes as savers express concern about potential changes to pension policies, with one of the main fears being the threat to the pension tax-free lump sum. Last year's Autumn Budget brought pensions under the inheritance tax net from 2027, prompting some to withdraw money from their pensions.
Financial advisors warn against making hasty decisions based on speculation about pension policy changes. While cash savings offer easier access and can be part of a successful retirement strategy, investing via a pension is generally considered the most effective way to build a retirement fund over the long term. Almost half of adults (48%) prefer cash savings over pensions or investments, but experts stress the importance of long-term growth and diversification.
As the Autumn Budget approaches on November 26, 2025, savers are urged to consider their retirement plans carefully. While cash savings can play a role, pensions remain a crucial tool for long-term growth. It's essential to stay informed and make decisions based on reliable information, rather than speculation or fear.
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