Pension withdrawals up 15 per cent to £6.5bn as flexibility allows savers to go elsewhere

Low annuity rates forcing investors to seek better yields

The total value of flexible payments made from Defined Contribution pension schemes has increased 15 per cent over the last year to £6.5bn, up from £5.7bn in 2015. 

Under new pension freedoms introduced in 2015, individuals over the age of 55 have been able to access their pension savings as they wish.

Tim Holmes, Managing Director at Salisbury House Wealth, the leading financial adviser, says:

“High levels of withdrawals are largely driven by the fact that annuity rates are just so low. Many people hoping to live on their pension savings are having to hunt for higher yielding assets outside annuities.”

“This increased flexibility of pension plans is needed if we are to encourage higher levels of investment into pensions.”

“There hasn’t been the tsunami of withdrawals that many have been worried about.”

“However, care must be taken to ensure that people do not take out too much which could affect their income in later life. Accessing funds without advice can be dangerous due to the constant rule changes imposed by successive governments.”

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