Since the introduction of the new pension freedoms in April, 83% of those that have taken up the new options have chosen to take all of their pension savings as cash, according to data from BlackRock’s workplace pensions business.
Data based on 1,152 people aged 55 and over who have exercised these freedoms also shows that, of this 83%, one-fifth (20%) have opted for an uncrystallised funds pension lump sum and 63% have taken a small pot of under £10,000.
The data also reveals:
- 14% of retirees have selected traditional annuity products, representing 20% of pension assets.
- Although just 3% have chosen the firm’s new income drowdown product, this represents 23% of assets.
- 61% accessed the government’s PensionWise service to help them decide what course of action to take, and just over a third (34%) sought formal financial advice. Of these two groups, 21% turned to both PensionWise and formal financial advice.
Paul Bucksey, head of BlackRock’s UK defined contribution business, said: “The early signs indicate the emergence of a new norm.
”The pension freedoms have changed the way people are choosing to access their retirement savings and for the better in our view, as people are using them to take more control of their finances.
“We have not been surprised by the take up for drawdown as an alternative to annuities. What this early data shows is that many people want to retain as much flexibility as possible.”
