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ABI: £2.4bn withdrawn from pensions post-freedoms

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Savers have withdrawn £2.4bn from pension pots in the first three months of the new freedoms, according to the Association of British Insurers.

Figures from the ABI show £1.3bn has been paid out in cash lump sums, with an average payment of around £15,000.

An additional £1.1bn has been paid out through 264,000 drawdown payments, with an average payment of around £4,200.

In July the ABI said £1.8bn had been taken out of pensions during April and May.

However the trade body says comparison cannot be made between the data because the figures have since been restated. It would not reveal what adjustments had been made.

Investment in drawdown totalled £1.3bn – with an average fund size of around £68,000 – while £990m has been spent on purchasing annuities.

However, 55 per cent of people buying annuities bought from their existing provider. By comparison, 45 per cent of people purchasing drawdown products did so from their ceding firm.

ABI director for long term savings policy Yvonne Braun says: “These figures are a testament to how well pension providers have adapted to the radical new approach to pensions which came into force on April 6th. They also show the popularity of the reforms.

“Many thousands of people have accessed their savings to get extra cash as they approach retirement. Meanwhile annuities, which guarantee an income for life, and income drawdown are proving attractive to those with larger pension pots.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Has anyone calculated the additional tax receipts that George has received as a result of this?

  2. Let me get this right.. the FCA are unhappy about provider mis-selling annuities, so they allow providers to mis-sell their own non advised drawdown product … madness

    • Mike from the many reports and articles relating to the whole of this industry, I am of the firm belief, the FCA don’t know what the hell they are doing, what guidance to issue the industry, and how to tackle the issues the government has put in place.
      Instead of doing one thing right at a time, they seem to be doing lots of things poorly, looking at each other and scratching there heads !

  3. Are they still planning to allow customers to sell their annuities next year.

    How long before all those chickens come to roost?.

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