The variety of pension pots accessed by pension savers for the primary time surged 18% in 2021/22, new Monetary Conduct Authority knowledge reveals.
In the meantime the overall worth of cash withdrawn from pensions climbed 22%.
The figures referring to the interval April 2021 to March 2022, revealed by the regulator, confirmed that the variety of pension plans accessed for the primary time was 705,666, up from 596,080 in 2021/21.
The general worth of cash being withdrawn from pension pots rose to £45,638m in 2021/22 from £37,432m the earlier yr.
Annuity gross sales rose 13% from 60,383 to 68,514, whereas greater than 205,000 individuals entered drawdown in 2021/22, a 24% improve from the 165,988 in 2020/21.
Tom Selby, head of retirement coverage at AJ Bell, stated: “The rise within the variety of individuals accessing their pensions for the primary time will inevitably spark fears of savers raiding their retirement pots to make ends meet in the course of the cost-of-living disaster.”
He stated that each one retirement revenue choices noticed a surge in reputation in 2021/22, together with annuities.
He stated: “Annuity gross sales have fallen off a cliff during the last decade or so, partially on account of the paltry charges on provide and partially due to the recognition of the pension flexibilities launched in 2015. Rising gilt yields has boosted the annuity charges insurers can provide, which in flip ought to make annuitisation a extra engaging possibility.”
Different figures revealed by the regulator revealed that 40% of standard withdrawals have been withdrawn at an annual price of greater than 8% of the pot worth, down from 43% in 2020/21.
In the meantime 33.4% of plans accessed for the primary time in 2021/22 have been accessed by plan holders who took regulated recommendation, up from 32.7% in 2020/21.
The variety of DB to DC transfers continued to fall from 30,596 in 2020/21 to 26,619 in 2021/22. The variety of corporations that obtained a DB to DC pension switch additionally fell from 63 to 57.