Pension savers pause withdrawals in lockdown
28th July 2020
The number of people taking tax-free lump sums from their pension pots more than halved during lockdown, according to a report.
Savers can take smaller sums of cash from their pension pots, with 25% of the withdrawal tax-free while the rest is taxable.
Government statistics show a record 348,000 savers took flexible payments worth £2.46 billion in the first three months of 2020.
But the Association of British Insurers (ABI) found the number of over-55s raiding their pension pots fell by 53% in March and April 2020.
The ABI said savers resisted temptation to raid their pension pots in the face of financial uncertainty caused by the coronavirus pandemic.
Rob Yuille, head of long-term savings at the ABI, said:
"As COVID-19 struck there was a fear that a pensions panic would hit, with mass pension withdrawals out of fear of stock market volatility and labour market uncertainty. Instead, customers held off in large numbers.
"The pandemic is a harsh reminder of the uncertainty of how long your retirement might last, what it will look like and what it will cost.
"More than ever it has shown that when it comes to making decisions on your pension, you should get expert help."
Get expert advice before accessing your pension early.