19 Nov 2020
The number of people withdrawing their pension in one lump sum rose by 94% between April and September.
This is according to data from the Association of British Insurers (ABI).
When compared to findings from the initial coronavirus lockdown earlier in the year up to when restrictions were eased in September, the ABI said the number of savers withdrawing a tax-free lump sum rose by 55%.
Moreover, the total number of people accessing their pension as a flexible income surged by 56%, and the number of annuity purchases rose by 41%, says a Pensions Age report.
The ABI said the increases were the result of “a combination of factors”, such as people needing the funds due to a change in circumstances.
Despite the increases, pension withdrawals of all types stayed under 2019 levels.
There was a 51% rise in people withdrawing their entire pension savings during the same time last year.
ABI’s head of long-term savings, Rob Yuille commented: “Government restrictions, stock market volatility and employment prospects are just some of the factors weighing on pension savers’ minds when considering taking money out of their pension pot.
“Everyone is different and it is important to find the right solution for your circumstances. Getting financial advice or guidance can help provide options and clarity on what to do with your savings.”
According to the Pensions Regulator (TPR) executive director of frontline regulation, Nicola Parish, the TPR was “concerned” that the coronavirus crisis could lead to people making “hasty decisions” that could harm their retirement plans.
“Savers, do not transfer your pension now and regret it later. Before any decision about your pot, visit The Pensions Advisory Service website for impartial guidance or get financial advice from a Financial Conduct Authority-authorised financial adviser.
“We also urge all providers, trustees and administrators to publicly commit to safeguarding savers by joining our campaign and pledging to combat pensions scams,” she added.