The pension freedoms introduced in April 2015 have resulted in a new record high for withdrawals from pension pots.
Withdrawals reached £1,770m in the second quarter of this year, which is more than double the figure withdrawn from pension pots in the first quarter.
According to analysis of the figures carried out by Aviva, the number of individuals taking advantage of the new pension freedoms has also more than doubled.
It was 74,000 in Q1 2016 and has grown to 159,000 in the second quarter.
New research from Aviva has highlighted the need for vigilance against the backdrop of these pension withdrawals, to ensure the long-term interests of savers are protected.
Aviva’s latest Real Retirement Report found that older people continue to see a pension as the best means of saving for their retirement.
Awareness of the new pension freedoms is riding high at 88% among those who have passed the qualifying age of 55; this is the youngest age at which you can take withdrawals from a pension pot.
However, two million of the thirteen million over-45 households who own their own home expect a need to borrow in retirement to support their lifestyle, so money is tight for many.
There is also strong evidence to say that people want to use their homes to support later life.
Six million want to use their home to provide income in retirement, perhaps by downsizing or through equity release; seven million want to use it to pay for long-term care; and eight million want to use their home to provide an inheritance for the next generation.
Combined, that’s 21 million demands for money on just 13 million households.
These insights raise the question: is there enough saving and home to go around?
Commenting on the new HMRC figures, Alistair McQueen, Savings & Retirement Manager at Aviva said:
“Aviva supports the new pension freedoms – we believe savers should be trusted with their own money. The new HMRC figures demonstrate a significant spike in their popularity.
“Aviva’s own insight shows the need for careful vigilance. The long-term interests of all savers must be protected.
“Money is tight for many, and the demands on our finite resources – savings and property – are great.
“Freedom, choice and popularity is to be celebrated, but savers must be supported to ensure their enthusiasm today does not damage their ambitions for tomorrow.”