HMRC have published their latest figures on the flexible withdrawals from pensions.1 Today’s figures report that the number of savers who have embraced their freedoms now exceeds one million (1.04 million).
A record-breaking sum of £7.83bn was withdrawn in 2018, up from £6.54bn in 2017. It is reported that there have been 5.49 million individual withdrawals since the pension freedoms were introduced in Q2 2015.
Commenting, Alistair McQueen, Head of Savings & Retirement at Aviva said:
“The pension freedoms show no sign of losing their popularity. More than one million savers have embraced their new freedoms since 2015, and a record £7.83bn of taxable payments were withdrawn in 2018.2
“There is however no evidence of an uncontrolled “dash-for-cash”, as was feared by some when the freedoms were introduced. The 2018 figure of £7.83bn needs to be seen in the context of a total private pension wealth in the UK of approximately £5,000bn.3 Withdrawal payments have also consistently averaged less than £4,000 since summer 2017, showing little evidence of savers rushing to buy Lamborghinis!
“These freedoms are attractive to younger savers too, with Aviva research finding that one third (33%) of under-35s believe this flexible access encourages them to put more money towards their pension." 4
The freedoms are a good news story for pensions and pension savers.
Five top tips to help make the most of the pension freedoms
- Pension Wise: Take advantage of the free Pension Wise government service, to understand your options from age 55 - www.pensionwise.gov.uk
- Understand your state pension: The state pension continues to be most peoples’ biggest source of income in retirement. But the state pension and age at which you are entitled to this money is changing. Ask for a free state pension forecast to ensure you understand your entitlements - www.gov.uk/check-state-pension
- Take your time: You may have spent 40 years saving for your retirement. Take more than 40 minutes considering your options.
- Consider your life expectancy: Pension savings are intended to last the rest of your life, yet we typically underestimate how many years we may live. The Office for National Statistics provides a handy life expectancy calculator.
- Approach final salary pensions with caution: If you have a final salary pension you will need to transfer it elsewhere to access the freedoms. This is a significant decision as you could lose significant benefits. Such a decision should be approached with caution, and normally with the guidance of a qualified financial adviser.
2 Note: This figure underplays the total amount withdrawn as it does not include any additional amounts taken as tax-free-cash.
4 Aviva 2018 survey of 1,000 UK adults: “Would you put more money towards your pension if you were able to access the money more flexibly?”
07800 692 299
Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers.
- In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
- Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £331 billion in assets (as at 31 December 2018). Total group assets under management at Aviva group are £470 billion (as at 31 December 2018).
- Aviva helps people save for the future and manage the risks of everyday life; last year we paid £32.9 billion in claims and benefits on behalf of our 33 million customers.
- By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
- The Aviva newsroom at www.aviva.com/newsroom includes links to our image library on Flickr, research reports and our news release archive.
- For an introduction to what we do and how we do it, please click here www.aviva.com/about-us
- Follow us on twitter: www.twitter.com/avivaplc/
- Follow us on LinkedIn: www.linkedin.com/company/aviva-plc
- For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva
- We have a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking.