Pension freedom withdrawals hit £25bn

The total amount of pensions that have been withdrawn since the inception of pension freedoms has hit £25.6 billion, according to figures from HMRC.

In its latest quarterly statistics report, HMRC revealed that £2.06 billion had been withdrawn in the first quarter of 2019. This brought the total amount drawn out since freedoms were introduced in Q2 2015 to £25.6 billion.

An AJ Bell analysis revealed that the average withdrawal per person stood at £7,254 in Q1 2019. This marked a year-on-year drop, with the Q1 2018 average being £7,644. It was also a significant drop from the first quarter of 2016, where the average per person was £11,081.

AJ Bell senior analyst, Tom Selby, said that the figures suggest that in the main savers are continuing to use the pension freedoms “sensibly”, and are keeping sustainability at the forefront of their minds when making withdrawals.

He added: “The number of people using the pension freedoms continues to increase as expected but importantly the trend in the average amount per withdrawal has been consistently on a downward trajectory over the four years since the new rules were introduced.”