Laura Stewart-Smith, Workplace Savings Manager at Aviva comments: “Contrary to the fears of some, this data shows there has been no “dash for cash” from pensions during lockdown.
“The average taxable withdrawal per individual fell to an all-time low of £6,705 in Q2 2020. This is the first time the average withdrawal has fallen below £7,000.
“There is also evidence that savers are holding back from accessing their pensions despite high levels of uncertainty. Q2 has always seen a sharp rise in withdrawals – until this year.
“For the first time since records began, Q2 2020 has reported a fall in the value of total withdrawals – down from to £2.28bn in Q2 2020 from £2.46bn in Q1 2020.
“This is encouraging news. Aviva has been reassuring savers not to panic during these times of market volatility. Pension decisions made under duress are rarely good ones. Today’s data gives confidence that this message has been heard.”
Aviva has some top tips for consumers considering withdrawing capital from their pension:
- Take your time: The pension freedoms are available from age 55, but there is no need to act at age 55. And your time in retirement may be longer than ever before. Act in haste and you may repent at leisure.
- Avoid the scammers: Pensions represent the biggest single source of private wealth in the UK, so the attraction for scammers is obvious. If you receive a cold-call to discuss your pension freedoms, just hang up. Since January 2019 it has been illegal to make these cold calls. See the FCA’s ScamSmart website for more advice.
- Use PensionWise: The government’s free PensionWise service provides free guidance on the pension freedoms. Take advantage. It has a high 97.9% customer satisfaction.
- Shop around: You may have been saving for 30 years, so take more than 30 minutes when considering your options. Shop around for your best deal.
- Think about tax: Nothing is certain, but death and taxes. Income tax follows us through our working life and into retirement. The way in which we access our pension savings can have significant implications for our tax bills, and income in retirement. With consideration, tax can be less taxing.