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Press comment:  Pension withdrawals could go either way

30/04/2020

If you’re covering the flexible payments from pension figures for Q1 2020 from HM Revenue & Customs please see the following comment from Ian Browne, retirement expert at Quilter:

“It is normal to see an increase in the number of people withdrawing from their pensions in the first quarter of the year as it edges toward the new tax year. In the first quarter of the new decade we have seen a substantial 18% increase in the amount withdrawn, bringing the total to over £35bn. However, even for normal trends the increase is substantially more than we have seen in the past. For instance from Q4 2018 to Q1 2019 we saw only an 8.4% increase in the amount withdrawn.

“It may be volumes increased as people, nervous about stock market volatility or Covid-19 in general started withdrawing more money. Next quarter’s figures should further illuminate the picture and in fact we could see the numbers go either way. People may withdraw less from their pensions as their expenses have declined or we may see that people are tapping into their pensions more as they are looking to fill a gap left due to to being furloughed or some other unforeseen circumstances. This combined with the recent negative investment performance can wreak havoc on a pension.

 

“It is vital if you do decide to use your pension more than previously planned that you think about the long term consequences. It is not just that sum that you won’t have later on down the line, compound interest means the growth of your pot will also deplete. Getting trusted financial advice is crucial to ensure your actions today don’t adversely impact your later retirement.

“Encouragingly, the data show that during Q1 we saw a 32% increase in individuals withdrawing funds, so we are seeing more people taking smaller but more frequent payments and using pension freedoms responsibly.”  

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

403,000

200,000

1,860,000,000

4,615

2.015

9,300

2017

Q3

435,000

198,000

1,590,000,000

3,655

2.197

8,030

2017

Q4

454,000

198,000

1,504,000,000

3,313

2.293

7,596

2018

Q1

500,000

222,000

1,700,000,000

3,400

2.252

7,658

2018

Q2

574,000

264,000

2,270,000,000

3,955

2.174

8,598

2018

Q3

585,000

258,000

1,960,000,000

3,350

2.267

7,597

2018

Q4

628,000

264,000

1,900,000,000

3,025

2.379

7,197

2019

Q1

648,000

284,000

2,060,000,000

3,179

2.282

7,254

2019

Q2

760,000

336,000

2,750,000,000

3,618

2.262

8,185

2019

Q3

778,000

327,000

2,370,000,000

3,046

2.379

7,248

2019

Q4

828,000

327,000

2,230,000,000

2,693

2.532

6,820

2020

Q1

827,000

348,000

2,460,000,000

2,975

2.376

7,069

For more information contact

Kathleen Gallagher023 8072 629307990 004932kathleen.gallagher@quilter.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 £95.3 billion in customer investments (as at 31 March 2020).

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: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

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

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

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.