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ABI pension freedom statistics one year on factsheet

Key trends from the first nine months of data:

  • Smaller pots are generally being taken as lump sums, with an average pay out of £14,800.
  • Larger pots are still being used to access a regular retirement income, with an average fund invested of £59,600. Almost £7.5bn has been invested to buy nearly 125,500 regular income products, either annuities or income drawdown products.
  • Annuity sales are recovering since the beginning of the reforms, with sales of new annuity products nearly on a par with drawdown. For the most recent quarter (Q4 2015) annuities proved more popular with new customers than income drawdown products with 21,200 sold, worth £1.1bn, compared with 19,700 drawdown policies, worth £1.4bn.
  • People are tending to use drawdown as a regular income product, with 65% withdrawn in Q4 2015 worth £1,000 or less. The majority of withdrawals from drawdown policies are from people in their 60s, with 62% of the value of withdrawals going to this age group in the last quarter.
  • The data shows that the amount of cash lump sum withdrawals is decreasing as the pent up demand following the reforms settles. Around £660m was withdrawn in cash in Q4 2015, compared to £1.3bn and £1.2bn in Q2 and Q3 respectively. Over half (55%) of cash withdrawals were less than £10,000.
  • In particular cash lump sums are proving popular with under 60s, with half of the value of cash lump sums being taken out by this age group in the last quarter.
  Q2 2015  Q3 2015 Q4 2015 Total-  nine months since reforms 
Cash withdrawals  £1.3bn paid out in cash lump sums, an average payment size of just under £15,000. £1.2bn paid out in cash lump sums, with an average payment size of just over £15,000. £660m paid out in cash lump sums, with average payment of just over £14,000.   £3bn paid out in just over 213,000 cash lump sum payments, an average payment of nearly £15,000.
Drawdown withdrawals £1.2bn paid out via 282,000 income drawdown payments, an average payment of nearly £4,200. £970m paid out via 324,000 income drawdown payments, an average payment of nearly £3,000. £730m paid out via 230,000 income drawdown payments, an average payment of nearly £3,200 £2.9bn paid out via 836,000 income drawdown payments, an average payment of £3,500.
 Annuity sales £990m invested in around 18,200 annuities, making the average fund invested just over £54,500. £1.17bn invested in around 22,380 annuities, making the average fund invested just over £52,300. £1.1bn invested in around 21,200 annuities making the average fund invested nearly £51,900 £3.3bn invested in around 61,700 annuities, making the average fund invested nearly £53,000.
Drawdown sales £1.3bn invested in 18,800 income drawdown products, an average fund size of almost £69,000. £1.55bn invested in 25,100 income drawdown products, an average fund size of almost £61,900. £1.35bn invested in 19,700 income drawdown products, an average fund size of almost £68,500. £4.2bn invested in 63,600 income drawdown products, an average fund of just over £66,000.

For more information, read our press release: ABI publishes latest data one year on from pension freedoms – reforms ‘settling in and working as intended’


Last updated 01/07/2016