Data from Retirement Line, the retirement income specialist, reveals that:
It has been a year since the government introduced the pension reforms that gave over-55s the freedom to access their pension fund how and when they want to.
Whilst the introduction of greater flexibility for pensions did not result in a spending spree on luxury cars as initially forecasted, the pension freedoms certainly made people think more about their pensions in a different way.
The reforms have spurred the development of a variety of flexible new products and changed how the over-55s have accessed their funds over the last year.
Latest figures from HMRC show that 232,000 people have used the new pension freedoms since last April, accessing a total of £4.3 billion by taking a partial or full withdrawal of their pension pot, taking money from a flexible drawdown account, or buying a flexible annuity.
David Slater, Chief Executive Officer of Retirement Line said:
“Annuities took a massive hit when the announcement of the reforms was made in the 2014 Budget – Retirement Line experienced a 50 per cent reduction in sales revenue practically overnight. Now people have had a chance to navigate the new freedoms and consider their options, they are returning to the certainty offered by a pension annuity.”
“April was another record breaking month for us since the effects of the April 2014 Budget. The figures demonstrate how important annuity products are to today’s retirees looking for a guaranteed income in retirement – and how these traditional products have clearly weathered the storm of the pension freedoms and come out stronger than before.”