1m Flexible Pension Payments Made

1m Flexible Pension Payments Made.

According to HMRC today, pension freedom has been used over a million times to access £7.6 billion.  Hundreds of thousands of savers have cashed in over £7.6 billion from their pension pots using government’s landmark pension freedoms, with over 1 million payments made to date.

New HMRC figures show that 1.1 million payments have been made since the pension freedoms were launched, with 158,000 people accessing £1.54 billion flexibly from their pension pots over the last 3 months. This brings the total amount of money withdrawn from pensions to £7.65 billion since April 2015.

Last year the government brought in the most significant pension reforms for a generation, giving people who’ve worked hard and saved their entire lives the ability to access their savings how and when they want.

Recent research from the ABI shows that the vast majority of pension savers are using the new freedoms well and making sustainable long-term retirement income decisions.

The Economic Secretary to the Treasury, Simon Kirby, said: “Today’s figures prove that allowing people to do what they with their hard-earned savings, whether it’s buying an annuity or taking a cash lump sum, is the right thing to do.”

The government has also announced plans to protect consumers by capping early exit fees, allowing earlier access to Pension Wise guidance, and working with industry to build a Pensions Dashboard prototype by April 2017.

Comment

Pension freedom and flexibility is a good thing but also a dangerous thing.  Whilst we believe it gives us all the confidence to invest in pensions knowing that we can access them or leave our hard earned money to loved ones, there is the danger that you can overspend and run out of money or invest in risky funds that do not perform well or cause losses.  That is our role, as a financial adviser, to advise you on funds, on risk and controlling the income that you drawdown.