Pension Freedoms: Savers withdraw £2.5bn from pots

According to ABI data, payments worth £2.5 billion were made to customers from pension pots in April to June. It added this was the equivalent of £27 million per day since the freedoms began.

In the same period, £2.3 billion was placed into buying nearly 37,500 regular income products, either pension annuities or income drawdown products.

Savers had taken out £1.1 billion in payments from income drawdown policies in 264,000 withdrawals.

Meanwhile, £990 million has been invested in around 17,800 annuities, making the average fund invested just over £55,600. 45% of those buying an annuity changed provider to do so.

The news comes after the ABI reported in July that £1.8 billion of withdrawals had been made in the first two months following the freedoms.

Yvonne Braun, director of long-term savings policy at the ABI, said that people would only be able to benefit from pension freedom if they built up a strong savings base during their working lives.

‘These figures are a testament to how well pension providers have adapted to the radical new approach to pensions which came into force on 6 April,’ she said.

‘They also show the popularity of the reforms. The pension freedoms should be able to play an important role in helping retirees shape their income to suit their financial needs over the rest of their lives.’

‘However, people will only be able to benefit fully if they have been able to build up enough in savings during their working lives. Creating a stronger savings culture is therefore vital.’

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