Savers are rushing to withdraw tax-free lump sums from their pensions ahead of the chancellor’s autumn budget on 26 November.

The amount drawn down rose by more than 60% in the last financial year.

Last October, the government said pensions would be subject to inheritance tax by April 2027.

Savers can currently withdraw 25% of their pension in a tax-free lump sum up to a cap of £268,275.

Pensions minister Torsten Bell previously described the regime as “very generous, very regressive, and a strange incentive not to stagger your retirement income” before entering government.

Some 211,000 people withdrew £18.1bn in the year to April, up from 163,500 and £11.25bn the previous year, the Financial Conduct Authority told wealth manager Evelyn Partners in response to a freedom of information request.

Tax-free lump sums reduce HMRC income by £5.5bn a year, according to the Institute for Fiscal Studies.