Pension freedom withdrawals break through £10bn

Here’s what AJ Bell has to say

UK consumers have withdrawn £10.8bn from pensions during the first two years of the pension freedoms, new figures have shown. 

Over £1.5bn was withdrawn in Q1 2017 while the average withdrawal per person continues to fall and now stands at £9,034 – less than half the average withdrawal in Q2 2015, the first quarter of pension freedoms

Tom Selby, senior analyst at AJ Bell, said: “The pension freedoms have clearly been hugely popular, with HMRC figures suggesting well over £10bn has been accessed flexibly in the first two years of the reforms. Given industry reporting was optional in 2015/16, it’s likely the actual figure is significantly higher.

“It is interesting to note that the average withdrawal per person continues to trend downwards, standing at just over £9,000 in Q1 2017. Hopefully this is indicative of savers managing their retirement incomes sensibly and making withdrawals at levels that will be sustainable over the long term.”

PeriodAverage withdrawal per person
Q2 2015 £18,571
Q3 2015 £14,444
Q4 2015 £11,940
Q1 2016 £11,081
Q2 2016 £11,132
Q3 2016 £9,747
Q4 2016 £9,630
Q1 2017 £9,034

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