Over 55s withdraw £4.7 billion under new pension freedoms
04/11/2015
Figures from the Association of British Insurers (ABI) have shown that the over 55s have withdrawn £4.7 billion under the new pension freedoms introduced in April.
There have been 166,700 cash lump sum payments worth £2.5 billion, working out to an average payment of just under £15,000. There has also been £2.2 billion paid out via 660,000 income drawdown payments, with an average payment working out at £3,600.
Annuity sales have also seen their first increase quarter on quarter for the last three years. In this quarter, there were 22,380 annuities sold to the total of £1.17 billion, compared to 18,200 to the total of £990 million last quarter.
The data also shows that the over 55s are looking around for the best deal as 60% of people have changed provider when buying an income drawdown policy, and 40% of people looking to buy an annuity also chose to change their provider.
The ABI’s Director for Long Terms Savings Policy, Dr Yvonne Braun, said:
"The peaceful pension revolution continues. While providers continue to meet high levels of demand, it’s clear that people are taking a sensible approach and considering how they will pay for their retirement.
“Despite some ringing the death knell for annuities, this seems to have been premature. An increasing number of people are recognising the value of a guaranteed income, with annuity sales rising this quarter. There are also initial signs that the number of people accessing their pension pot as cash is beginning to settle down, with larger pots continuing to be used to buy retirement income products.
“However, the figures also show that ensuring people save enough for retirement remains our key challenge. With life expectancy increasing and final salary pension provision declining, we must now turn our attention to helping customers grow bigger pots.”
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Another day another strike in the UK
It has been revealed that AA patrolman will strike for the first time in the company's 105 year history amid plans by the company to restructure the final salary pension scheme. The Independent Democratic Union revealed that 57% of members who have voted so far have voted in favour of industrial action as a means of trying to protect their pension arrangements. Whether the company will come back w...
Read MoreSir Fred looks forward to old age
Sir Fred Goodwin has indicated to the government that he is unwilling to give up any of his rumoured £16 million pension pot which is estimated to be producing a pension in the region of £650,000 per year. The pension arrangements were rubberstamped by the UK authorities back in October although the government is now claiming it was "misinformed" about the structure and size of Sir Goodwin's pen...
Read MoreUnited Utilities amends terms of pension scheme
In what many believe could be the start of a whole wave of adjustments to defined benefit pension scheme arrangements, United Utilities has this week announced changes for the future. The company had been running a deficit of £359 million at the end of September 2009 but this has now fallen to £271 million at the end of March 2010. So what changes are afoot? In simple terms the United Utiliti...
Read MoreBusinesses urged to promote pensions
Employers are being called on to do more to promote pensions among staff and make people recognise how important a pension plan is to their future.Des Hamilton, technical director for The Pensions Advisory Service (TPAS), said that there is an onus to "make people understand that they cannot afford not to join" a pension scheme.He said that there exists a "lack of understanding" when it comes to p...
Read More