Those saving for a pension have been withdrawing around £27 million a day from their pots following the implementation of new retirement freedoms, figures from insurers reveal.
The new pension freedoms, announced within last year’s Budget by Chancellor George Osborne, mean that people over 55 can take their pots however they wish, instead of being required to buy an annuity.
Within the first three months, around £2.5 billion payments were made to savers after new pension regulations for over-55s were introduced in April, reports the Association of British Insurers (ABI).
The research, taken from figures from April, May and June, reveals that £1.3 billion was paid out in cash lump sums, with average payment sizes of nearly £15,000.
264,000 income drawdown payments contributed to around £1.1 billion being paid out, with the average payment figure reaching £4,200.
The income drawdown scheme allows savers to leave their pension pot invested but still be permitted to take an income directly from it.