Fears that the Chancellor would target pension tax reliefs in her Budget last week fuelled an eightfold increase in SIPP contributions in October, analysis by Bestinvest has shown.

This was compared to the two-year average for the same month in 2022 and 2023.

Speculation over the tax changes that Rachel Reeves would deliver in her maiden Budget meant that many savers and investors, fearful of a raid on their savings, made major moves in a bid to protect as much of their wealth as possible.

However, this speculation did not entirely match up to last week’s announcements on tax, leaving some to backtrack on their decisions.

Pension withdrawal requests had more than doubled in October compared to the same month in 2023 – a surge primarily driven by those aged 55 and over accessing their 25 per cent tax-free lump sum in case it was reduced. Since the Budget, however, some clients have cancelled their requests.

Bestinvest also reported a more than fourfold increase in ISA contributions in October (413 per cent) compared to the previous two-year average for the same month.

“This was one of the most anticipated Budgets in a generation and the level of speculation reached such heights that many DIY investors felt compelled to make major financial decisions more akin to the end of the tax year,” said Bestinvest personal finance analyst, Alice Haine.

“Making investments more tax efficient by topping up ISAs and pensions will continue to benefit an individual’s overall financial position over the long-term, provided that money was not earmarked for more immediate needs.”

Haine also said that the anxiety the Budget had caused for many on the cusp of retirement meant that withdrawal requests also surged, as people “became fearful” that the ability to take 25 per cent tax free cash from pensions would get reduced.

“Thankfully people have a 30-day cooling-off period for first crystallisations and some clients have now reconsidered their position and cancelled their withdrawal requests since the Budget on 30 October,” she added.

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