During Q4 2020, more people accessed their pensions and more money was withdrawn, compared to Q4 2019. A total of £2.4bn was withdrawn from pensions in Q4 2020, a 6% increase from the £2.2bn withdrawn in Q4 2019.
HMRC data indicates that 360,000 people accessed their pensions in the three months to 31 December 2020, up 10% from the same period in 2019, meaning the average amount withdrawn per individual was lower1.
There is usually a slight decrease in the number of savers accessing their pensions in the final quarter of the year, meaning that this change in behaviour is potentially a result of the pandemic. With unemployment and redundancies rising, many people may be feeling the need to dip into their pensions, for relatively small amounts in some cases.
Weigh your options carefully
Taking money from your pension may seem attractive in the current climate, but it’s not without its risks. We can help you weigh up your options so that you can make an informed decision.
The value of investments and income from them may go down. You may not get back the original amount invested. Inheritance Tax Planning is not regulated by the Financial Conduct Authority. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.