Pension freedoms used by 230,000 in first year - but demand cools
Almost a quarter of a million savers have taken advantage of the pension freedoms introduced a year ago. Government figures, released yesterday, disclosed that £4.3 billion has been cashed in.
However, the data shows the amount of money taken out has progressively fallen off over the past six months.
In the first quarter of the freedoms being introduced, from 6 April to the end of June, £1.56 billion was withdrawn by 84,000 individuals. Over the next three months £1.17 billion was taken from pension pots, by 81,000 people.
The amount of money cashed in continued to fall in the following two quarters, to £800 million for the final quarter of 2015 and £820 million for the first quarter of 2016. The number of people cashing in has also declined, to 67,000 and 74,000 respectively.
Alistair McQueen, savings and retirement manager at Aviva, says: "The latest data indicates a market that is settling, with no strong evidence of reckless behaviour as a result of the pension freedoms.
"This is consistent with our own research, which found that the vast majority, 71% of over 50s, have no intention of changing their retirement plans as a result of the freedoms."
The data also found that Pension Wise, the free guidance service, was used by less than one in four individuals who have taken flexible payments in the past year.
There were a total of 36,000 face-to-face meetings and 18,000 telephone engagements. There had, however, been more than 2 million visits to the Pension Wise website.
This article was written for our sister website Moneyobserver.