Retirement savers have accessed approximately £28.4 billion since pension freedom reforms were introduced in April 2015, according to data from HM Revenue and Customs (HMRC).
The Flexible payments from pensions: July 2019 official statistics report also found that the number of individuals who received flexible payments from their pensions in the second quarter of 2019 is 336,000; this is an increase of 27% from 264,000 in quarter two of 2018.
This compares to 539,000 individuals who received flexible payments from their pensions between quarter two of 2018 and quarter one of 2019, 270,000 between the second quarter of 2017 and the first quarter of 2018 and 327,000 between quarter two of 2016 and the first quarter of 2017.
Since the introduction of pension freedoms in April 2015, approximately 1.2 million individuals have accessed flexible payments, and a total of 6.9 million payments have been made.
In quarter two of 2019 specifically, the average amount withdrawn per individual was £8,200, a decrease compared to £8,600 in the second quarter of 2018. Pension savers withdrew a total of £2.75 billion over 760,000 payments in quarter two of 2019, a 21% rise from £2.27 billion in quarter two of 2018.
Helen Morrissey, pension specialist at Royal London, said: “[These] figures show that enthusiasm for the pension freedoms remains high, with a record level of pension withdrawals and a record number of people taking money out of their pensions.
“But the average amount withdrawn is down to £8,200. This could indicate that people are taking a prudent approach of taking smaller amounts as and when they need it as opposed to taking all of the money at once. This flies in the face of initial fears that people would empty their pots and leave themselves vulnerable in later retirement.”
Between January and March 2019, 648,000 payments were received by 284,000 individuals, totalling £2 billion. This compares to 628,000 payments to 264,000 individuals in the fourth quarter of 2018, worth £1.9 billion.
From July to September 2018, 585,000 payments were made to 258,000 individuals, totalling £1.9 billion. Between April and June 2018, 574,000 payments were made to 264,000 individuals, amounting to £2.2 billion.
Steven Cameron, pensions director at Aegon, added: “A record number of people accessing their pension flexibly underlines how working patterns in later life have evolved. Over the last four years, the retirement behaviour of over 55s has been significantly influenced by pension freedoms and [these] figures show more people are choosing to access their pension, but increasingly withdrawing a smaller amount when they do so.
“With people no longer choosing to retire at a single point in time, the freedoms give them the flexibility to transition into retirement by accessing some retirement savings to help support a reduced working pattern.
“Older [employees] want to be able to plan their retirement on their own terms and the introduction of pension freedoms enables that by allowing them to reduce their working hours while enjoying more leisure time.”
The figures are based on data reported to HMRC, with numbers rounded to the nearest 1,000. The yearly individual totals are lower than the sum of the quarterly individual numbers, as some have taken payments in multiple quarters.
Reporting was optional up to April 2016, when it was made compulsory. For this reason, figures prior to this are not comprehensive. This may account for part of the increase in reported payments seen in the second quarter of 2016.