Latest Treasury data shows savers have cashed in a total of £9.2bn from their pension pots since pension freedoms were introduced in April 2015, but the rate of withdrawal is slowing
Figures for the last quarter of 2016 indicate 162,000 people accessed £1.56m in the last three months of the year. This follow on from 158,000 people taking out £1.54m in the previous quarter.
However, both quarterly totals are below the £1.77m in withdrawals made by 159,000 individuals in Q2 2016. The amount each individual is taking out is also declining. The £1.56m withdrawn in Q4 2016 went to twice as many individuals as the same total withdrawn in Q2 2015 which was accessed by just 84,000 people.
As a caveat, HMRC points out that reporting on pension withdrawal figures was only made compulsory in April 2016, so earlier voluntary figures may not be complete.
Simon Kirby, economic secretary to the Treasury, said: ‘Giving people freedom over what they do with their hard-earned savings, whether it’s buying an annuity or taking a cash lump sum, is the right thing to do. These figures show that people continue to take advantage of the choices on offer.
‘We are working with our partners, including Pension Wise, the regulators and pension firms, so that savers have the support they need to understand the options available to them.’
The government is currently consulting on a proposed approach to crack-down on pensions scams, after claims that some people who have made withdrawals have lost out.
The proposals include banning pensions cold calling; giving more powers to firms to block suspicious transfer;, preventing people’s lifesavings being transferred into scams without any checks; and making it harder for scammers to open fraudulent pension schemes, through stopping small self-administered schemes setting up using a dormant company as the sponsoring employer.
The consultation on pension scams closes on 13 February and details are here.
