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Pension freedom withdrawals

26/07/2017

If you are covering the figures released by the HMRC today on the number of people taking pensions flexibly, please see the below comment from Ian Browne, pensions expert at Old Mutual Wealth: 

Ian Browne“Today the Government has announced that those accessing pensions freedoms has hit an all-time high of £1.8bn.  

“The data reveals that people have grasped an understanding of the power of freedoms. People are withdrawing less per payment and increasing the frequency of how many withdrawals they make. These trends have fallen dramatically since the beginning of freedoms and are now starting to stabilise [see table below].

“However, the FCA warned in its Retirement Outcomes Review that over half of customers are taking their retirement savings and investing in something else, like an Isa, cash, buy-to-let or fixed-term deposit. It is important that the regulator and the industry continues to educate people on how to manage their withdrawals.

“The popularity of pensions freedoms has increased over the years, but other government policies seems to be putting barriers in the way of its continued progress. The government recently confirmed they will go ahead with the controversial cut to the Money Purchase Annual Allowance (MPAA) and this will affect a pool of people that want to continue contributing after taking a pension withdrawal.

“Giving people the freedom to withdraw retirement income as and when required has made a flexible transition to retirement possible. Many will prefer to phase into retirement, reducing their working hours and topping up income with pensions, particularly as the state pension age is increasing. But under the MPAA, those that choose to top-up income with a retirement fund and then later make contributions during period of work could be punished by this regressive curb on the standard annual allowance”

 

Year

Quarter

No. of Payments

No. of individuals

Total value of payments

Av value per payment

Av No. of payments per individual

Av value paid to individuals

2015

Q2

121,000

84,000

1,560,000,000

12,893

1.440

18,571

2015

Q3

130,000

81,000

1,170,000,000

9,000

1.605

14,444

2015

Q4

123,000

67,000

800,000,000

6,504

1.836

11,940

2016

Q1

142,000

74,000

820,000,000

5,775

1.919

11,081

2016

Q2

296,000

159,000

1,770,000,000

5,980

1.862

11,132

2016

Q3

324,000

158,000

1,540,000,000

4,753

2.051

9,747

2016

Q4

393,000

162,000

1,560,000,000

3,969

2.426

9,630

2017

Q1

381,000

176,000

1,590,000,000

4,173

2.165

9,034

2017

Q2

393,000

200,000

1,860,000,000

4,733

1.965

9,300



For more information contact

Kathleen GallagherOld Mutual Wealth023 8072 629307990 004932kathleen.gallagher@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

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This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.