Preheat oven to 350 degrees.
Grease bundt pan.
Microwave butterscotch chips on medium for 1 minute. Microwave for additional 10-20 SECONDS at a time as needed until melted (stirring in between). DO NOT overcook, as it will ruin the butterscotch and it won't mix well. Cool to room temperature.
Combine flour, sugar, baking powder, cinnamon, and salt in a medium bowl.
Stir together melted butterscotch, pumpkin, oil, eggs, and vanilla in a large bowl.
Stir in the flour mixture to the pumpkin mixture.
Spoon into the bundt pan.
Cook 40-50 minutes or until toothpick comes out clean.
Cool completely.
Sprinkle powdered sugar on top, if desired.