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130,000 will raid pension pots for cash

ABOUT 130,000 people a year will choose to take cash out of their pension pot when the new rules to give retirees more financial ­freedom come into force, according to estimates from HM Revenue and Customs (HMRC).

The projections also ­indicate Chancellor George Osborne's shake-up is set to generate a Treasury windfall of about £3.8 billion over the coming five years as people move to cash in their pension pots, subject to tax.

The reforms, which were unveiled in the Budget, mean that from next April, people will be able to cash in their pension pot subject to their normal tax rate.

About 400,000 people will be able to do this next year and HMRC estimates that about 130,000 of them, ­equating to about one in three of those who are eligible, will take advantage of the new pension flexibility.

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