Savers are taking a ‘sensible approach’ when accessing their pension, according to data released by the Association of British Insurers (ABI).
The data shows that 57% of pots have had 1% or less withdrawn from them in the last quarter. A further 4% of pots had 10% or more withdrawn in 1 go.
55% of cash withdrawals were for less than £10,000. For savers who cashed in their entire pot, 96% were worth less than £10,000.
Important findings:
- there were 300,000 lump sum payments totalling £4.3 billion (an average withdrawal of £14,500)
- £3.9 billion has been paid out in 1.03 million drawdown payments (with an average payment of £3,800)
- £4.2 billion has been invested in annuities (with an average fund of £52,500)
£6.1 billion has been invested in 90,700 drawdown products (with an average of £67,500).
A large proportion of savers are looking at different providers. 41.5% of savers switched when buying an annuity and 53% chose a different provider when they accessed their money through drawdown.
Quote from Nigel Holland:
“The Association of British Insurers (ABI) noted that most savers adopt a ‘sensible approach’ to accessing their pensions.
Whilst it is positive that the majority of savers have a ‘sensible approach’ regarding accessing their pension pots. However, it is worrying that there exist the minority who either make premature withdrawals from their pension pots, or taking it all out at once, making it worth much less. This may be due to various factors , but nethertheless highlights an issue that needs further examination.”
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