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Pension drawdown rules 2025: are your retirement savings future-proof?

The 2025 Pension Shake-Up is Coming

For decades, UK pensions have provided a sense of financial security, allowing retirees to plan for a stable future. However, with 66% of pre-retirees worried about how pension drawdown rules changes will impact them, it’s clear that confidence is wavering. And with good reason.

Changes to pension drawdown rules, taxation policies, and inflation pressures mean that what worked for previous generations may no longer be enough. From April 2027, pensions will be subject to inheritance tax (IHT), dramatically altering how wealth is passed down. Meanwhile, speculation about reducing the 25% tax-free lump sum allowance has left many questioning whether they should access their pension earlier than planned.

At the same time, inflation continues to erode the real value of money. A pension pot that seemed substantial five years ago may not stretch as far today. Low interest rates on savings accounts only make matters worse, offering retirees little growth potential outside of traditional pension drawdowns.

66% of pre-retirees worried about how pension rule changes will impact them

With all these uncertainties, relying solely on a traditional pension pot could leave you exposed to unexpected costs and limitations. Whether you’re planning to withdraw a lump sum, opt for flexi-access drawdown, or invest in an annuity, it’s crucial to reassess your approach. Is your pension future-proof? Will it stand up to economic shifts, tax hikes, and market volatility?

This guide explores what’s changing, the risks of outdated pension strategies, and how to diversify your retirement income to ensure a financially secure future. Let’s break it down.


The Problem with Traditional Pension Drawdown

Pension drawdown is one of the most flexible ways to access retirement savings, but recent economic shifts and regulatory changes are making it riskier than before.

Inflation: The Silent Wealth Eroder

Pensions are built to last, but inflation can drain your purchasing power faster than expected. According to the Office for National Statistics (ONS), the UK’s inflation rate has fluctuated between 4% and 10% in recent years, meaning that a £100,000 pension today could be worth just £74,409 in a decade.

Most pensions are invested in low-risk, low-return assets, meaning they may not grow fast enough to keep pace with inflation. This puts retirees in a difficult position—either withdraw more each year or accept a declining standard of living.

The Tax-Free Lump Sum May Not Last

One of the biggest benefits of UK pensions is the ability to withdraw 25% of your pension pot tax-free, but this rule is under increasing scrutiny. While no official changes have been announced, some financial experts warn that the government could reduce this allowance in future budgets to increase tax revenue. The Institute for Fiscal Studies has proposed scrapping the 25% tax-free pension withdrawal, and with the current government’s keen interest in pension reform, there is concern this idea will find its way into policy.

If this happens, retirees who haven’t already withdrawn their tax-free sum will lose out. This makes it crucial to reassess the timing of your pension withdrawals and consider whether utilising your tax-free lump sum withdrawal  before potential changes take effect could be beneficial.

Inheritance Tax is Coming for Your Pension

Until recently, pensions were one of the few assets that were exempt from inheritance tax (IHT), making them a smart way to pass down wealth to family members. However, starting April 2027, pensions will be subject to the same 40% inheritance tax as other assets.

This means that if you plan to leave your pension to your children or grandchildren, a large portion of it will likely go straight to the government instead. Finding alternative ways to preserve wealth and transfer assets outside of pension structures is now more important than ever.

Alternative Strategies to Future-Proof Your Pension

Given these challenges, it’s time to rethink retirement strategies and explore alternative ways to safeguard wealth. Here are some options:


Asset-Based Savings: Gold as a Safe Haven

One of the most reliable ways to preserve wealth against inflation and economic instability is through gold. Unlike cash or traditional investments, gold retains its intrinsic value over time.

  • Gold has historically outperformed inflation, maintaining its purchasing power for centuries.
  • It isn’t subject to the same banking and pension regulations that can limit access to your money.
  • Modern gold-based savings solutions, such as TallyMoney, provide the flexibility of a bank account while holding real physical gold.

TallyMoney offers retirees a way to store savings in an asset that isn’t affected by government policy shifts or financial crises.

 
Individual Savings Accounts (ISAs) for Tax-Free Growth

ISAs provide a tax-efficient way to grow wealth without worrying about capital gains or income tax.

  • Cash ISAs allow for tax-free savings, though interest rates are typically low and likely to not outpace inflation. Meaning real-value erodes over time..
  • Stocks & Shares ISAs provide potentially higher returns, though they carry stock market ups and downs investment risk.
  • Innovative Finance ISAs offer access to peer-to-peer lending opportunities for those comfortable with alternative investment vehicles with no insurance or security.

Property Investment: Generating Passive Income

Real estate has long been a favoured asset class for long-term wealth preservation.

  • Rental income provides a steady cash flow without needing to withdraw large lump sums from a pension.
  • Property values generally rise over time, offering capital appreciation potential.
  • Investing in real estate through a pension (SIPP or SSAS) can provide additional tax benefits.
  • However property ownership is complex, requires ongoing management, exposes landlords to tenant risks, and requires keeping pace with legislative changes. Hardly a ‘retirement’ solution. 
  • In addition property ownership is highly illiquid and complex to sell. 

While property investment requires management and maintenance, it can serve as a hedge against pension instability and tax changes.

Taking Control of Your Retirement Plan

Many pre-retirees are now taking proactive steps to secure their financial future by diversifying their retirement income. So what does the ideal solution look like?

  • It should be low complexity. 
  • It should offer the potential for inflation-beating growth. 
  • It should be 100% secure. 
  • It should be within your total control. 
  • It should be easily accessible and liquid in case you need it. 

Steps to take control of your retirement plan.

  • Assess your current pension drawdown plan—ensure it’s aligned with new tax rules and inflation realities.
  • Consider alternative savings vehicles—gold, ISAs, and property can help protect wealth outside traditional pensions.
  • Consider how it meets the ‘ideal list’ above.
  • Stay informed about regulatory changes—pension rules are evolving, and adapting early can prevent costly mistakes.

The financial landscape is shifting, but by planning ahead, you can ensure your retirement remains secure and flexible.

 
Final Thoughts: Future-Proof Your Retirement Today

Relying solely on traditional pension drawdown may no longer be the safest route to a financially secure retirement. With rising taxes, inflation, and new government regulations, retirees must look beyond pensions and consider alternative wealth preservation strategies.

By integrating gold-based savings, tax-efficient ISAs, and diversified investments, you can protect your wealth and gain the flexibility to enjoy retirement on your own terms.

With major pension changes on the horizon, now is the time to ask: Is your pension future-proof? If not, it’s time to take action. 

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Real World Examples

  1. Fancy a coffee? Use your TallyMoney Mastercard. Boom – paid. (Yes, you’re buying a flat white with gold. How amazing is that?)

  2. Need cash? Use any Mastercard ATM worldwide or spend across the globe. ZERO fees from us, ZERO markup. (When you spend or withdraw, your gold converts instantly at the global spot price. No catches, no hidden charges – just straight-up Mastercard exchange rates. Because your money shouldn’t cost you… more money.)

  3. Want some money back in your bank? Just tap ‘transfer’ in the app. (Though after a while, you might wonder why you’d want to…)

    Zero faff. Zero waiting. Zero fees when you spend tally.

Meet Cameron Parry

Meet the guy who wouldn’t accept being trapped in a ‘heads they win, tales we lose’ government-run monetary system that protects and benefits the financial institutions, to the detriment of the public. Where people’s deposits are constantly at risk, and losing value through inflation caused by central bankers and politicians.

If necessity is the mother of invention, then frustration may be the roommate’s cousin of motivation. In any case, he decided to stop getting mad and start a new monetary system with sound money. Where deposits serve the depositor, where savings build wealth for savers, and transactions are made in a familiar way. And he called it TallyMoney.

TallyMoney: Gold upgraded

With TallyMoney:

  • Your pounds instantly become physical gold (1 tally = 1mg of real gold)
    Stored in Swiss vaults (not under your bed)
  • Fully insured and allocated (actually yours, not a paper promise)
  • Spend it anywhere with your TallyMoney debit Mastercard
  • Transfer back to pounds instantly if needed (but why would you?)

We’re not anti-bank because it’s trendy. We’re anti-bank because the current system is rigged against you. Every day you leave money in a “savings” account, you’re funding their profits while your wealth evaporates.

Enter gold: the original currency

Why gold? It’s value is universally acknowledged.

  • It’s not controlled by any single government
  • It can’t be printed or manufactured
  • It’s actually scarce 
  • It requires effort to extract it 
  • It doesn’t rust, decay, or disappear
  • It has remarkable properties

So while the pound’s lost 50% of its value since 2004, gold’s grown by 146% in the last decade alone. While your bank savings got mugged by inflation, gold owners were laughing all the way to… well, not the bank.

But here’s the rub: Traditional gold ownership is a right pain. Buy physical bars? Prepare for storage fees that’ll make your eyes water, insurance premiums that never end, and a 5-10% haircut when you need to sell. Plus, try buying your weekly shop with a gold ingot.
Paper gold ETFs? They’re classed as Tier 3 assets for a reason – that’s financial speak for “risky as hell.” You don’t own gold, you own a promise. A tradeable IOU. And when everyone wants their gold at once? Good luck with that. So you’re stuffed either way: real gold that’s impossible to use, or fake gold that might not be there when you need it.
Until now.

The truth about inflation

How? Well, when politicians overspend (and they invariably do), they need more money to ‘stimulate the economy’. But raising taxes makes voters angry. So what do they do? They fire up the money printer, and boy do they love to print. To give you a sense of the scale, since 2015 the Bank of England has created £520bn out of thin air through “quantitative easing” (electronic money printing) plus £86bn in physical currency. 

Thing is, more pounds in circulation = each pound is worth less. Think about it: In 2004, £100 could buy you a decent night out, theatre tickets, and a cab home. Today? That same £100 barely covers the theatre tickets. Your money didn’t disappear – it was diluted, like someone’s been topping up your whisky with water when you weren’t looking.

The “2% inflation target” they bang on about? That’s them telling you they plan to steal 2% of your wealth every single year. And calling it healthy.

How TallyMoney actually works?

  1. First things first: we’ve got actual gold bullion* (none of that paper-promise nonsense) locked up tight in a Brinks vault in Switzerland. Yeah, those Brinks – the security legends who’ve been protecting valuables since Queen Victoria was on the throne.

  2. You send your pounds to your TallyMoney account (bye-bye, inflation-addicted fiat!).

  3. We use the global gold spot price to instantly turn your currency into its weight in gold. No hidden or fuzzy exchange rates, just the real market gold price + 1.49% gold purchase fee.

  4. Each milligram of your physical gold = 1 tally (we keep it decimal because no one wants to faff about with troy ounces – the specific unit for measuring gold).

  5. That’s it! Your app shows your balance in tally, but remember – those aren’t just numbers on a screen. That’s your solid gold, in milligrams, sitting pretty in Switzerland.
  6. You can now save and spend your gold as you see fit.

*All Tally gold is sourced from LBMA-accredited providers because we’re rebels with a cause… and standards. Instead of tracking the gold price per kg, your money is directly converted based on the real-time global gold spot price.

TallyMoney is 
real money

  1. Store of value
    Your gold sits in a Swiss vault (not getting ‘quantitatively eased’ away)
    Evidenced by 5,000 years of holding its value
    Can’t be inflated by government whim and fingers on the ‘currency print’ button
  2. Medium of exchange
    Spendable at 150+ million shops worldwide (thanks, Mastercard)
    Currency converts instantly at market rates (no sneaky margins)
    Moves as quickly as sending a text 
  3. Unit of account
    1 tally = 1mg of gold. Simple
    Stable enough to actually plan your future with
    Speaks every currency’s language (gold’s kind of a big deal everywhere)

This is why TallyMoney is so much more than just owning Gold – it’s a real financial revolution. We’re not just helping you own gold; we’re bringing back what money was always meant to be. Sound Money for a Brighter Future. Because your hard work and wealth deserve better than being slowly robbed by external forces.

We want you to have real money

  1. A store of value:
    Keeps its value over time
    Insulated from devaluation/inflation
    Actually rare and can’t be created out of thin air
  2. Medium of exchange:
    Easy to use for everyday transactions
    Widely accepted
    Can be transferred efficiently
  3. Unit of account:
    Works like a proper value-measuring stick (imagine if your ruler shrunk every year – mad, right?)
    Splits nicely into useful bits
    Reliable enough to plan your future with

Why does this matter? Because your hard work deserves better than being turned into monopoly money by someone else’s actions. Every time your currency loses value (inflation) its stealing from your past work, which harms your present savings, and your future dreams.