According to new figures from HMRC, a record £2.3 billion was taken out of pension pots in the second quarter of 2018 thanks to pension freedoms. This figure is an increase of 35% when compared to the first quarter of the year when £1.7 billion was withdrawn, showing the increasing popularity of the initiative that was introduced in 2015 by the then Chancellor of the Exchequer George Osborne.
The total amount of money withdrawn since 2015 now stands at £19.8 billion and more than four million flexible payments have been made to more than one million individuals. The average amount withdrawn per person is £8595, almost £1,000 higher than the previous quarter but £700 lower than the second quarter of 2017.
Commenting, Steve Webb, Director of Policy at Royal London, said: "These figures show the continuing popularity of pension freedoms. In the latest three months over a quarter of a million people took the opportunity to make flexible withdrawals from their pension, and withdrawals were at a record level. The key challenge is to make sure that more people take advice and guidance when deciding how to access their pension savings so that they do so in a sustainable way that meets their objectives".
The HMRC report is entitled "Flexible payments from pensions: July 2018" and can be found on the HMRC website. The figures used are based on data reported to HMRC, with reporting only being mandatory since April 2016. This may account for part of the increase in reported payments seen in the second quarter of 2016.