Wealth managers warn Rachel Reeves that pension withdrawals are rushing ahead of the UK budget.

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Some of the UK's biggest wealth managers have warned Chancellor Rachel Reeves that people are withdrawing money from their pensions prematurely due to uncertainty about potential tax changes in the Budget.

Asset manager Quilter and investment platforms AJ Bell and Hargreaves Lansdown are among the companies highlighting that more and more people are considering leaving their pensions amid speculation the government could dilute pension tax relief.

Steven Levin, CEO of Quilter, which manages $113 billion, sent a letter to the Treasury Department Wednesday noting that wealth managers are seeing a significant increase in calls from clients seeking to adjust their retirement plans.

He said this was a direct result of the recent budget warning, which indicated painful changes to taxation but left gaps in information other than ruling out changes to key taxes.

The Quilter letter added: Further uncertainty about pension tax relief, tax-free cash and possible pension contribution revisions is causing anxiety and confusion for people trying to plan for their financial future.

Investment experts have warned of a potential tax blitz on pensions in this month's budget as the UK government tries to plug an identified $22 billion hole in public finances.

Individuals can currently receive 25% of their pension tax-free from age 55 up to a maximum of $268,275. Left-wing think tank the Fabian Society has called on the government to lower the tax exemption limit to 100,000. .

But once the tax-free lump sum is withdrawn, you can't take the tax-free cash out again, although the amount could continue to grow, which has raised concerns among financial advisers and wealth managers.

AJ Bell, one of the UK's largest investment sites, told the Financial Times it would write to the Treasury about the issue. AJ Bell said it had warned the Treasury that it was concerned customers were making decisions about their pensions based on guesswork and uncertainty.

You can't put the toothpaste back in the tube once you've taken the tax-free cash, and assuming the Prime Minister doesn't pursue a disastrous raid on the tax-free cash, those people could find themselves in a worse position in the long term, reveals Tom Selby. Director of Policy at AJ Bell. The Prime Minister should use his inaugural budget to publicly commit to a deal on pension taxation.

One of the UK's largest workplace pension providers, which declined to be named, said tax-free cash withdrawals had also increased.

Another industry source said the volume of pension withdrawal inquiries was similar to the surge in inquiries about personal finance issues at the end of last tax year in April.

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Pension providers including insurance groups Aviva, Royal London and Standard Life, and wealth managers including Evelyn Partners, have seen a surge in inquiries from individuals considering putting a tax-free lump sum ahead of their budget in case the government reduces these limits. People who are knowledgeable about the matter.

Jason Hollands, managing director at Evelyn Partners, said that of all the potential budget measures, this was certainly one of the key areas causing anxiety. He said there has been a surge in inquiries and conversations from customers concerned about the issue.

Quilters Levin said the current uncertainty is leading to reckless decisions that could jeopardize long-term financial stability.

Our financial planners are fielding calls from anxious clients, many of whom are at risk of prematurely adjusting their retirement plans without fully understanding the potential consequences.

The government may reduce the maximum amount individuals can contribute to their pensions each year tax-free, which was increased from $40,000 to $60,000 in April last year.

The Treasury Department declined to comment.

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