Pensions - Articles - 2025/26 taxable flexible payments from pensions hit £22.4bn

in 2025 to 2026, £22.4 billion in taxable payments was withdrawn from pensions flexibly. This has increased from £18.6 billion in 2024 to 2025 and £15.3 billion in 2023 to 2024

 

Through Q1 2026 (January-March 2026), £5.9 billion of taxable payments was withdrawn from pensions flexibly by 770,000 individuals across 1.9 million payments. The average taxable withdrawal per person was £7,700 in this period – an 18% increase in the value of payments withdrawn in this quarter compared to the same quarter in 2025, and a 15% increase in the number of individuals withdrawing.

 

David Brooks, Head of Policy at Broadstone, commented: “The continued growth in taxable pension withdrawals is to be expected given the growing number of people reaching retirement with defined contribution pension pots. However, the 18% annual increase in the value withdrawn during the first quarter of 2026 compared to the previous year is striking and suggests that financial pressures may be encouraging savers to access more of their pensions.

 

“The true concern is that we have little conclusive evidence to gauge how savers are accessing their pensions and whether they are doing so in a sustainable way. Pension freedoms provide valuable flexibility but inevitably increase the risk that savings are depleted too quickly, particularly where people underestimate how long their retirement may last.”