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Comment on pension freedom stats

HMRC has published the latest pension freedom stats, which shows £9.2bn has been flexibly accessed.

Andrew Tully, pensions technical director, Retirement Advantage commented: ‘It’s great to see people using the new pension freedoms, but these overall numbers mask some emerging and concerning trends.

‘Many more people are using drawdown to access their pensions, with significantly lower average values and at much younger ages. This may be fine if many of these people are simply taking a tax-free lump sum, or accessing a small amount of their pension. But given many people will live to a ripe old age, starting to dip into their pension at age 55 and 60 may well bring its own challenges later in life.

‘With more people in drawdown having smaller pots, first accessing their pension at younger ages, and possibly having a lower capacity for loss than traditional drawdown customers, ongoing reviews of the suitability of drawdown become ever more relevant and important.’