Around three in five (58%) independent financial advisers (IFAs) are reporting that their clients have made withdrawals from pension lump sums due to speculation about pension tax relief ahead of the Budget.

This is according to new polling by Opinium which revealed IFAs are seeing significant concerns and changes to financial behaviour from their clients due to speculation around which policies the Chancellor may announce next week.

Opinium’s findings, based on a study of 200 IFAs, found that 11% of respondents believe Budget speculation has also led to some clients making plans to delay their retirement.

A quarter (26%) of IFAs said they had seen clients sell private rental properties, amid speculation that the Chancellor intends to make rental income subject to National Insurance. A quarter (24%) also reported that clients have brought forward disposals, with 22% saying their clients have been crystallising unrealised gains or losses ahead of the Budget, as uncertainty mounts around potential changes to the tax system.

Opinium CEO, James Endersby, commented: “Our research highlights the degree to which Budget speculation is already influencing financial behaviour.

“With rumours of major tax changes growing, many IFAs are seeing clients act pre-emptively, from drawing down pension lump sums to offloading rental properties. This level of activity underscores the deep uncertainty about what the Chancellor may announce in the Budget.”

In a sign of further financial ripples to come once the Chancellor makes her Autumn Statement, 77% of IFAs reported that some of their clients have raised concerns about changes to pension tax relief in the upcoming Budget, while 64% said clients had raised enquiries due to speculation around a wealth tax.

Over half (54%) of IFAs also said their clients have raised concerns around the Chancellor introducing Capital Gains Tax (CGT) on sales of primary residences.

“While we don’t yet know how much of the speculation will be borne out, the impact is already being felt in people’s financial behaviour,” added Endersby.

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