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ABI pension freedom statistics one year on factsheet

Key trends from the first year of data:

  • The vast majority of savers are taking a sensible approach, with 57% pots with 1% or less withdrawn during the most recent quarter.
  • However, there are signs a minority may be withdrawing too much too soon with 4% of pots having 10% or more withdrawn in the last quarter.
  • Smaller pots are generally being taken as lump sums, with an average pay out of £14,500.
  • Larger pots are still being used to access a regular retirement income, with an average fund invested of £60,000. Almost £10.3bn has been invested to buy nearly 170,700 regular income products, either annuities or income drawdown products.
  • The data shows that the amount of lump sum withdrawals are decreasing from the beginning of the reforms as the pent up demand settles. Around £750m was withdrawn in cash in Q1 2016, compared to £1.4bn and £1.27bn in Q2 and Q3 respectively. Over half (55%) of cash withdrawals were less than £10,000.
  • For the most recent quarter, almost all savers who cashed in their whole pension pot (96%) were worth less than £10,000. In particular cash and drawdown withdrawals are proving popular with under 70s, with 71% of the value of cash lump sums being taken out by this age group in the last quarter.
  • From the latest quarter, the average pot being used to buy a drawdown product (£52,700) is now less than the average pot used for an annuity (£52,900), which shows drawdown is available to a wider market following the reforms.
  • Annuity sales have fallen in the most recent quarter, with £950m invested, however drawdown sales remain consistent, with £1.48bn invested.
  Q2 2015  Q3 2015 Q4 2015 Q1 2016* Total - twelve months since reforms 
Cash withdrawals  Just over £1.4bn, average payment size just over £14,500 £1.27bn paid out in cash lump sums, with an average payment size of just under £14,000. £860m paid out in cash lump sums, with average payment of just over £12,000.  £750m paid out in cash lump sums, with average payment of just over £19,000**  £4.3bn paid out in just over 300,000 cash lump sum payments, an average payment of nearly £14,500.
Drawdown withdrawals £1.29bn paid out via 297,000 income drawdown payments, an average payment of just over £4,300. £1bn paid out via 338,000 income drawdown payments, an average payment of just over £3,000. £906m paid out via 240,000 income drawdown payments, an average payment of roughly £3,700 £700m paid out via 153,000 income drawdown payments, an average payment of just over £4,600** £3.9bn paid out via 1.03m income drawdown payments, an average payment of £3,800.
 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 £950m invested in around 18,000 annuities making the average fund invested nearly £52,900 £4.2bn invested in around 80,000 annuities, making the average fund invested nearly £52,500.
Drawdown sales £1.45bn invested in 20,700 income drawdown products, an average fund size of almost £69,800. £1.71bn invested in 26,100 income drawdown products, an average fund size of almost £65,400. £1.49bn invested in 20,600 income drawdown products, an average fund size of almost £72,300. £1.48bn invested in 23,200 income drawdown products, an average fund size of almost £52,700. £6.1bn invested in 90,700 income drawdown products, an average fund of just over £67,500.

 

  • These figures will vary from figures previously published due to a change in grossing to better utilise our data and give a more accurate representation of the market.
  • The ABI has aligned to the FCA’s data template, so withdrawal figures between Q1 2016 are not directly comparable to previous quarters.
  • Drawdown sales figures for all quarters will be different from figures previously published due to a restating of this data by a specific company.

Last updated 17/10/2016