Pre-Budget speculation and policy tinkering damaging consumer confidence in retirement says Nucleus
Unhelpful pre-Budget speculation including possible changes to tax-free cash and political tinkering with rules around pensions has damaged retirement confidence among savers, Nucleus has said, making it far more difficult for savers to plan ahead with any certainty for the long term.
Today’s adults are facing an increasingly challenging landscape when it comes to planning and investing for retirement, including contending with the news that pensions will be included as part of an individual’s estate for inheritance tax (IHT) planning purposes.
Savers have faced weeks of speculation around possible cuts to tax-free cash in the upcoming Autumn Budget. Even though changes to tax-free cash have now reportedly been ruled out by the Chancellor, the rumour will certainly have resulted in many people pulling money out of their retirement savings unnecessarily, potentially damaging their long-term retirement plans.
In its 2025 Retirement Confidence Index report, Nucleus found that the proposals around IHT and pensions may be driving unwanted and potentially damaging behaviour. With around 1 in 7 of younger/middle aged respondents (15% of those aged 25-34, 14% of 45-54) saying they are paying or will pay less into their pensions as a result.
The report found clear evidence that policy changes, uncertainty and speculation leads to self-destructive behaviours. People saving for retirement are being driven to make long-lasting decisions that cannot be reversed.
Another worrying statistic from Nucleus’ report is that only one in four UK adults (26%) are confident they will have enough money to live comfortably for the rest of their lives, down from the previous low of 34% in 2024.
Andrew Tully, Technical Services Director at Nucleus, said: “It’s a tough environment for pension savers today, and the last thing they need is to feel like they aren’t in control of their retirement savings planning because of government tinkering, uncontrolled speculation and changes to existing rules.
“Changes to pension tax-free cash withdrawals reportedly being off the table for this year’s budget is welcome news, but without a stable retirement framework the same damaging rumour will continue to drive behaviour ahead of future fiscal events. To help UK adults feel more confident about their financial futures, we need long-term planning in pensions. We cannot be in a position that sees savers make drastic changes to their retirement savings because of rumour and speculation, because they don’t trust that pensions will be left alone.”
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