Retirement savers have accessed approximately £15.7 billion through the pension freedoms since the pension reforms were introduced in April 2015, according to data from HM Revenue and Customs (HMRC).
Its Flexible payments from pensions: January 2018 report also found that the number of individuals who have received flexible payments from their pensions between the second quarter of 2017 and the fourth quarter of 2017 is 489,000, compared to 232,000 individuals who received a flexible payment from their pension pot between the second quarter of 2015 and the first quarter of 2016, and 393,000 individuals who have done this between the second quarter of 2016 and the first quarter of 2017. Since pension freedoms were introduced in April 2015, approximately 1.1 million individuals have accessed their pension for flexible payments.
During October to December 2017, 454,000 payments were made by 198,000 individuals, totalling £1.5 billion. This compares to 435,000 payments made in the third quarter of 2017, which were made by 198,000 individuals and amounted to £1.59 billion. In April to June 2017, 403,000 payments were made by 200,000 individuals, totalling £1.86 billion. Between January and March 2017, 381,000 payments were made to 176,000 individuals, amounting to £1.59 billion.
The figures are based on data reported to HMRC. Reporting was optional up to April 2016, when it was made compulsory. For this reason, figures prior to this are not comprehensive.
Nathan Long, senior pension analyst at Hargreaves Lansdown, said: “Rather than use pensions to splurge on an extravagant Christmas, retirees have operated restraint when managing their pensions, showing the new rules are bedding in nicely and the amount being withdrawn is stabilising.
“The number of payments made has increased, but this could simply be a reflection of more and more people using drawdown for their income in retirement. Someone [who takes] drawdown to provide a monthly income will have three payments in each quarter, so we should expect these number of payments to continue to grow as more and more people choose this strategy. The fact the rate of growth is slowing actually shows that the dash for cash is abating and retirees are facing up to managing their pension pot to provide for their life after work.”
