The number of people taking a full cash withdrawal from their pension pots has fallen by 9 per cent, Financial Conduct Authority (FCA) data has revealed.
In the regulators September data bulletin, published yesterday, 6 September, it said that while the number of pots accessed for the first time was “consistent”, the number taking a full cash withdrawal was significantly down.
Full cash withdrawals are more prominent with smaller pots, as 87 per cent of the pots that were fully withdrawn over the year were less than £30,000.
FCA director of market intelligence, data and analysis, Jo Hill, said: “Overall, consumer behaviour in accessing pensions remains consistent with the same period in the previous financial year. For example, the total number of pension pots accessed for the first time is similar to the same period in the previous financial year.
“There has been a decline in the number of full cash withdrawals made this period, but drawdown products and partial withdrawal products taken have increased. The shift away from annuities has stabilised, with a slight increase in the number of annuities purchases this period compared to the year before.”
Commenting on the findings, Hymans Robertson partner, Stephen Birch, said that he thought the results were part of a wider trend, but also highlighted the growing advice gap.
“The cost of advice means it’s out of reach for most, and that’s a situation we’re unlikely to see improve any time soon. 90% of DC savers earn less than a £100k and have retirement savings of less than £200k. They cannot afford advice, and guidance they can access is not sufficiently clear nor specific to their personal circumstances to be helpful,” he said.
Furthermore, the FCA found that pots that entered drawdown for the first time increased by 8 per cent.
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