Following today’s release by HMRC of the latest number and value of flexible payments made from pensions since April 2015, Adrian Walker, retirement planning manager at Old Mutual Wealth, commented:
“The simple fact that almost a quarter of a million people have accessed their pension savings flexibly should not be held up as a measure of success for the Government’s pension freedoms reforms. I agree that people generally should be treated as adults and given the ability to access their money when and how they like, within reason. The real test will be whether these 230,000 people are still enjoying a comfortable retirement in 10 or 20 years, not only one year in.
“What today’s new figures do seem to show is a slight shift in the pattern of pension payments over the last quarter, with a smaller number of retirees taking a larger number of payments. This could be an indicator that behaviour is changing and fewer people are taking larger sums, while a greater number take sustainable regular income withdrawals. Most providers witnessed an initial ‘gold rush’ from last April to around June as customers made use of the freedoms perhaps to pay down debts but if feels like we are approaching something akin to a ‘new normal’.
“As understanding improves, we have seen more people taking a considered approach in conjunction with their adviser, which includes blending the benefits of multiple income options from small pots, drawdown and annuity.”