One in four not seeking official advice when taking early pension

Over £6 billion has been paid out from pension savings since last year’s freedom and choice reform, but less than a quarter of Britons are seeking advice before withdrawing, a HMRC report has revealed.

The figures show that almost 232,000 people withdrew from their pension savings between April 2015 and March 2016, with that figure set to grow year on year.

However, of the 232,000 people who withdrew, just 58,000 – or one in four – had sought official advice, the report shows.

Simon Kirby, economic secretary to HM Treasury, said: “It is only right that people should have a choice over what they do with their money and today’s figures show that pension freedoms continue to be a popular choice”.

Figures released by HMRC show that in the second quarter of 2016 alone, £1.7 billion was paid out to over 159,000 people.

“Our pension reforms have already given hundreds of thousands of people access and responsibility over their hard-earned savings and we will continue to make sure that the pension freedoms work well for everyone”, said Mr Kirby.

He added: “We will work with our partners, such as Pension Wise and the Department for Work & Pensions, to ensure consumers are protected and that there is clear information to help people understand their options”.

Last year’s historic reform saw the Government open up pensions savings for over 55’s, providing people with several options to reflect their needs in retirement.