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Pension freedom withdrawals top £10bn

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Consumers have taken advantage of the pension freedoms to withdraw more than £10bn from their pots, latest HM Revenue and Customs data shows.

Figures for the first quarter of 2017 show 176,000 individuals drew 381,000 flexible payments from their pensions, taking out a total of £1.59bn.

The figure is the highest for three quarters, but is down on its peak of £1.77bn in the second quarter of 2016.

Total payouts since the freedoms were introduced in April 2015 have now hit £10.8bn, with £6.4bn having been withdrawn since the second quarter of 2016.

Demand did dip in the final quarter of 2015 and the first quarter of 2016 as initial interest subsided, but now looks to have flattened out.

Hargreaves Lansdown head of policy Tom McPhail says: “After the initial bow-wave of demand in the first two quarters of 2015, the retirement income market appears to have settled and stabilised remarkably quickly. Annuity transactions (reported elsewhere) have stabilised too at around 20,000 a quarter; so all this data suggests the pension freedom reforms are bedding in well.

“We would like to see policymakers producing more detailed qualitative analysis now, digging into individual investors’ circumstances and decision-making to make sure they’re not going to be running out of money 15 years from now.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. And for how many people, we wonder, has cashing in their pension fund actually been a prudent long term decision?

  2. Christine Brightwell 27th April 2017 at 12:01 pm

    I suspect the Govt does not care if the tax take in up!

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