Advice to savers

More raid pension pots during pandemic

pension pot

More savers have taken out their entire pension pot

The number of people accessing their pension for income increased by 56% between April and September this year, according to new data.

Many are withdrawing funds after holding back during stock market volatility at the start of the pandemic, while the number withdrawing their entire pension pot has almost doubled.

Comparing data when restrictions were eased in September to April, when the country was in full lockdown: 

  • The number of people taking only a tax-free lump sum has increased by 55%.
  • The number of people withdrawing all of their pension in one lump sum increased by 94%. This increased by 51% during the same period in 2019.
  • The number of people buying a guaranteed income for life (annuity) increased by 41%.

The ABI has been monitoring people’s behaviour around pension withdrawals throughout the pandemic.

Data from August and September shows withdrawal levels are getting closer to levels seen in 2019 but many pension savers are still resisting the urge to raid their pension pots in the face of continued financial uncertainty.

The ABI is urging anyone considering accessing their pension to seek impartial financial guidance from Pension Wise or regulated financial advice, and to ask their provider about their options.

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