Steven Cameron, Pensions Director at Aegon said: “Since the start of the pandemic, we’ve seen a change in behaviour amongst those taking flexible withdrawals from their pension. In previous years, we’ve seen a peak in withdrawals in Q2 followed by a slight drop off in Q3 and Q4. However, as in most walks of life, the pandemic has led to a reversal in usual trends and following a decrease in Q2 2020, the number of withdrawals has risen 4% to 360,000 in Q4 2020 compared to the previous quarter and 10% compared to Q4 2019.
“However, encouragingly, the average amount withdrawn has again fallen, now sitting at £6,600 a 3% year on year fall. This shows over 55s continue to exercise restraint during a period of stock market volatility.
“The figures, showing over £42 billion in flexible withdrawals since the freedom began in 2015, come on the eve of the launch of investment pathways. From the 1st February pension providers will offer new support for individuals who decide to take a flexible retirement income through drawdown but who don’t take financial advice. With the popularity of the pension freedoms every increasing, pathways are designed to help steer individuals away from inappropriate investment approaches. However, they will not help in deciding how much income to take. Pensions are designed to provide an income throughout retirement and investment pathways do not replace the need for tailored professional financial advice.”
* https://www.gov.uk/government/publications/flexible-payments-from-pensions/flexible-payments-from-pensions
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