As the government marks the first anniversary of the pension’s revolution, the first full year figures released today (Wednesday 27 April) reveal that over 230,000 savers have already taken advantage of the new landmark freedoms.
One year ago (April 2015), the government introduced the most significant pension reforms for a generation giving people who’ve worked hard and saved their entire lives the ability to access their savings how and when they want.
As the HMRC figures, published today, show the new freedoms have already proved to be very popular. In the first year 232,000 accessed £4.3 billion flexibly from their pension pots.
This is alongside the popularity of Pension Wise, the government’s free and impartial pension’s guidance service, which has already had over 2.2 million visits to the website and nearly 55,000 appointments to date.
The Economic Secretary to the Treasury, Harriett Baldwin said:
It’s only right that people should have a choice over what they do with their money and in their first year our successful pension freedoms have already given thousands of people access and responsibility over their hard-earned savings.
We will continue to make sure that the pension freedoms work well for everyone, including through working with our partners to ensure consumers are protected and that there is simple information to help people understand their options.
The government has already taken action to ensure the new freedoms work for consumers and that they have the right information to make informed decisions.
It has announced that it will be capping early exit fees, allowing earlier access to Pension Wise guidance, and working with industry to introduce a Pensions Dashboard.
It has also announced that it is extending the popular freedoms even further, giving millions more people the right to sell their annuities if it’s best for them from April 2017.
Since the pension flexibility rules took effect from 6 April 2015:
- 232,000 individuals have accessed their money flexibly
- people have flexibly accessed over £4.3 billion of their own money through 516,000 payments
- in the most recent quarter, 74,000 individuals withdrew £820 million. In the previous quarter, 67,000 individuals withdrew £800 million.
- figures are taken from information voluntarily reported to HMRC by pension scheme administrators from 6 April 2015 to 31 March 2015. It is not mandatory for scheme administrators to flag these up as pension flexibility payments until April 2016
- HMRC statistics cover ‘flexible payments’, which means partial or full withdrawal of the pension pot, taking money from a flexible drawdown account, or buying a flexible annuity.
- the statistics are available on GOV.UK
- the figures for the current quarter (April to June 2016) will be published in July 2016
- Pension Wise is available online at pensionwise.gov.uk or you can book a telephone or face to face appointment by calling 0800 138 3944
The government will implement all recommendations from the Financial Advice Market Review (FAMR), including:
- consulting on introducing a single clear definition of financial advice to remove regulatory uncertainty and ensure that firms can offer consumers the help they need
- increasing the existing £150 Income Tax and National Insurance relief for employer-arranged pension advice to £500