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Tax-free withdrawals from pensions have soared by 61% amid fears that Chancellor Rachel Reeves could target retirement pots in her autumn Budget.

Data from investment platform Interactive Investor shows a sharp jump in the number of pension tax-free cash withdrawals last month compared with August 2024.

The rise suggests that savers are clearly nervous that the Government may reduce the size of the tax-free lump sum that people can take from their pension pots.

Currently people can withdraw up to 25% of their pension nest egg free of tax up to a maximum of £268,275. There are suggestions the figure could be reduced to £100,000.

The rush comes despite the fact personal finance experts have warned people against taking crucial decisions based on speculation and rumour.

Pensions minister Torsten Bell has refused to rule out a raid on pensions on November 26, fuelling anxiety among those hoping to protect their retirement savings.

Craig Rickman, of Interactive Investor, said the surge was partly due to the firm's growing number of self-invested personal pension customers.

He said: "While the upwards trend can be explained in part by increases to Interactive Investor's SIPP book over the past couple of years, it's clear that more people are drawing larger amounts of their pension tax-free cash, presumably in fear that the Government will scrap or reduce the maximum amount currently available."

This week, two well-known pension experts, Tom McPhail, a scheme trustee, and Stephen Lowe, of annuity firm Just Group, admitted they were considering raiding their own pensions amid uncertainty over the tax-free allowance.

Mr Rickman warned that a decision to bring pension pots into the scope of inheritance tax from April 2027 may also be having an impact. Any money still held in a pension pot when someone dies will be subject to inheritance tax at 40%.

He told the Telegraph: "It's understandable that people might get nervous and seek to get ahead of any potential reforms.

"But once you've drawn your pension tax-free cash the decision can't be reversed, and taking the lot in one hit might not be the best course of action.

"Savers should think carefully before reacting to speculation and make choices with their long-term future in mind, taking expert advice where necessary."

Ian Futcher, of financial advisers Quilter, echoed the caution, pointing to last year's pre-Budget panic.

"A lot of people reacted pre-emptively before the last Budget and then had regret. There were a lot of people who took it out, not realising you couldn't put it back in again," he said.

Mr Futcher warned that some savers may now hold "large lump sums not protected in tax wrappers with no idea what to do with them." He added:

"The added danger of taking out the lump sum is you are taking out potential growth further down the line. It's always tempting to act, but this could leave you with really bad unintended consequences for future planning."

Over £18bn was withdrawn tax-free from retirement pots in the year to the end of March 2025, up from £11.25bn the previous year, according to the Financial Conduct Authority.

A Treasury spokesman said: "We do not comment on speculation around changes to future tax outside of fiscal events.

"We continue to incentivise pensions savings for their intended purpose - of funding retirement instead of them being openly used as a vehicle to transfer wealth."