Pension pot access drops for first time since freedoms started

The FCA has reported that there has been a fall in consumers accessing their pension pots for the first time since the new rules came into effect. In the last quarter, October to December, in particular, there was a decrease in the number of pots, which were being fully withdrawn as cash, an FCA report stated.Officials also revealed that this quarter 37,150 new drawdown policies were entered into and not fully withdrawn.The survey collected data on whether a provider has recorded use of a regulated adviser and found customers’ use of regulated advisers differed across each product type and by pension pot size.The highest levels of adviser use were for customers going into drawdown (68%). Across all products and withdrawals, consumers with larger pots were more likely to have used a regulated adviser.The pension freedom data bulletin stated: “During October to December 2015, consumers accessed 127,094 pension pots for the first time, to take an income or fully withdraw their money as cash.“Since pension freedoms came into effect in April 2015, we have seen a gradual decline in the total number of pension pots being accessed for the first time each quarter. In the first quarter (April – June 2015), almost 220,0005 pots were accessed and this has fallen to just over 125,000 in October to December 2015. The greatest level of activity was in the period following the reforms.“The number of annuities purchased in the last quarter remains relatively unchanged since the previous quarter, but there has been a significant fall in the number of full cash withdrawals from pension pots.”The report also revealed that customers aged 55 to 59 had the highest rate of withdrawals as a percentage of their pension pot, with 11% of these customers taking an income of 10% or more of their pot.Our data includes regular withdrawals for both drawdown and UFPLS customers where a regular payment is set up. Some 57% (12,708) of annuity purchases made by customers were from their existing pension provider.This was a decrease from the previous quarter where 64% of annuity purchases made by customers were from their existing pension provider.Some 53% (19,507) of drawdown purchases by customers were from their existing pension provider.

Pension pot access drops for first time since freedoms started

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