The numbers were released on Wednesday 27th April, said that just over 232,000 savers aged over 55 had used pension release to secure cash using the new rules which came into force 12 months ago.
These “pension freedoms” allow savers older than 55 to dip into their pension pot, or even release all the cash in one go. Which is different to the more usual purchase of an annuity.
However since the numbers were released the number of savers using pension release has fallen.
£1.56bn in what are called ”flexible” pension payments was withdrawn by 84,000 people, and those figures include complete withdrawals and ad-hoc payments.
But 3 quarters of a year later, and the number of pension release payments made in the final quarter had dropped by almost 50% to £820m. There was also a drop of more than 10% in the number of applicants.
A quote from Harriet Baldwin, economic secretary to the Treasury stated that the new pension freedoms had “proved to be very popular”.
“It’s only right that people should have a choice over what they do with their money and in their first year our successful pension freedoms have already given thousands of people access and responsibility over their hard-earned savings,”
“We will continue to make sure that the pension freedoms work well for everyone, including through working with our partners to ensure consumers are protected and that there is simple information to help people understand their options.”
Source: Financial Times