Chancellor, John Healey, should leave pensions out of his first Budget on 28 October, AJ Bell has stated in its latest regulatory outlook.

With just a few weeks to go until Healey’s inaugural budget, AJ Bell highlighted a series of recent pensions policy developments.

These included Prime Minister, Andy Burnham's, proposal to replace the state pension triple lock with a new "double lock" from 2030 and the government's expected plans to prevent the lowest earners from paying tax once the state pension exceeds the personal allowance from April next year.

AJ Bell head of public policy, Rachel Vahey, said: “Depending on this month’s inflation figures, the state pension is expected to rise by 3.9 per cent next April, taking it above the personal allowance for the first time.

“The government has promised that the lowest earners will not pay tax on their new state pension.

“But the detail is still unclear. We will have to wait until the Budget to see who benefits from this promise – and who doesn’t.”

Recent Financial Conduct Authority (FCA) data showed that pension tax-free cash withdrawals in 2025/26 were £14bn higher than the average level recorded before the general election.

Responding to this, Vahey said: “There are already major changes coming in the new tax year when unused pension funds will be brought into the inheritance tax net. But speculation about further pension changes risks doing real damage.

“We have seen the real-life consequences play out over the past two years when rumours about the future of tax-free cash helped drive tax-free cash payments to £22bn last tax year – up by £14bn compared with the average prior to the last election.

“That is bad news for households and the economy. Not only are some people being rushed into making irreversible decisions that could be bad for them and their finances, but taking billions out of pensions early means less capital available for long-term investment.”

AJ Bell therefore renewed its call for a pension tax lock, urging the government to commit to preserving the current tax advantages of pensions for the remainder of this parliament.

“It would cost the Treasury nothing,” Vahey said, “give savers certainty and send a clear message that the government stands behind its commitments to pensions.”

---