Fresh stampede from pensions as savers fear John Healey's Budget will be even worse than Rachel Reeves's

Updated: 11:30 EDT, 9 October 2026 John Healey’s Budget is making savers even more nervous than they were in the run-up to the last one under Rachel Reeves – prompting a fresh stampede of cash from pension funds.Figures from trading platform IG show 63pc are more worried about what Healey will do in his debut Budget in two and a half weeks’ time than they were ahead of last year’s.They also reveal 44pc have taken out cash from pension funds ahead of this year’s Budget, or plan to do so, as they fear changes to tax rules on lump sum withdrawals.That will add to the £40bn pulled out in the past two years as savers panicked over Reeves’s Budgets.Michael Healy, chief executive for IG’s consumer business, said the figures ‘should set alarm bells ringing in the Treasury’.He added: ‘The Chancellor cannot afford to let another Budget trigger a stampede on pension savings. With £40bn already withdrawn in tax-free lump sums over the past two years, the damage caused by pension tax speculation could be felt by people in years to come.’IG’s poll also reveals that 45pc of investors have sold or are considering selling assets ahead of the Budget because of fears of changes to capital gains tax (CGT) or other taxes. Investors are anxious no matter which Labour Chancellor is at the controlsIt illustrates how anxious ordinary investors have become as they worry that they will be made to pay the price for Labour’s soaring debt and ballooning spending – no matter which of its chancellors is in Number 11.That is despite Healey’s attempt to draw a line under the gloom engendered by Reeves’s term in office, admitting her approach had ‘eroded prosperity’.Reeves was widely criticised for stoking months of kite-flying ahead of her last Budget, even calling an unprecedented Downing Street press conference to hint she would put up income tax – before U-turning.Her two Budgets were also characterised by persistent worries – which proved unfounded – that she would stage a tax raid on retirement pots.Under current rules pension savers can withdraw up to 25pc of their nest eggs tax-free from the age of 55 up to a maximum of £268,275.Influential Labour figures have long seen that as a potentially lucrative source of tax revenue.Torsten Bell, now pensions minister, said in 2023 before the party came to power that ‘a future government may well cut’ the limit. In 2019, as boss of the Resolution Foundation think-tank, he advocated reducing it to £40,000 to raise £2bn a year.Labour has refused to quash speculation this has raised by ruling out a raid on pension pots, despite warnings from industry about the damage it is causing.Figures last month showed lump sum withdrawals rocketed to £18 billion in 2024 and £22 billion in 2025 thanks to the speculation. That compared to an average £8 billion in past years.IG’s Healy added: ‘People are making decisions about decades of retirement savings based on fears of what the Chancellor might announce.‘The danger is that people rush to protect their money from a tax change that may never materialise, only to sacrifice years of potential investment growth and leave themselves worse off in retirement.‘The Government wants to encourage more people to invest for the long term, yet the uncertainty surrounding pensions - and the ongoing Capital Gains Tax rumours - risk achieving the exact opposite.‘Hopefully we will see the Chancellor put an end to this speculation and give investors and pension savers the certainty they need.’