Last week’s HMRC flexible payments from pensions figures revealed a record £2.75bn was withdrawn from pension savings in Q2. This represents an all-time high by some distance, up by 21% (around £500m) from the previous peak of £2.27bn in Q2 2018.
In total, nearly £5bn has been flexibly accessed from pensions so far in 2019 and nearly £30bn since the introduction of pension freedoms back in 2015.
Stephen Lowe, group communications director at Just Group, told IFA Magazine:
“While Q2 usually represents a high point for flexible pension withdrawals following the start of the new Tax Year, the jump in 2019 is bigger than ever before and represents a 21% increase from the previous high recorded over the same period last year.
“But billions of pounds of tax free cash payments are not included in these figures nor are many other pension withdrawals, such as small pot withdrawals or purchases of guaranteed income for life solutions. On top of this, the figures don’t tell us how much individuals have withdrawn or how often.
“More than four years on from the introduction of pension freedoms we still do not have anywhere approaching complete information on how these reforms are influencing the retirement outcomes of millions of people.
“In the absence of any meaningful data it’s absolutely essential that the FCA prioritises the challenge the government has set it to ensure everyone receives independent and impartial guidance before accessing their pension savings – making sure that choosing not to take guidance is an active, rather than a passive, choice.”