The total number of pension pots accessed for the first time decreased by 12 per cent year-on-year to 596,080 in 2020/21, the Financial Conduct Authority (FCA) has revealed.
Its Retirement income market data 2020/21, which analysed data from the year April 2020 to March 2021, showed that the number of pots accessed had declined from 673,831 in 2019/20.
Of the pots that were accessed for the first time, 33 per cent were accessed by pension holders who took regulated advice, down 3 per cent from 2019/20.
Annuity purchases continued to decline, according to the data, with the number of pots used to buy an annuity falling by 13 per cent to 60,383.
More than half (59 per cent) of the annuities were taken by people over the age of 65.
The number of pension pots fully withdrawn at the first time of access decreased by 9 per cent to 341,404, with nine in 10 of these withdrawals being for pots worth less than £30,000.
Of the pots fully withdrawn, 108,869 were worth less than £10,000, while 1,499 people fully withdrew pots worth more than £100,000.
The number of pots entering drawdown fell from 197,118 to 165,988 during the year, while pots with first crystallised fund pension lump sum payments but not fully withdrawn fell from 31,664 to 28,305.
Almost half (43 per cent) of regular withdrawals were withdrawn at an annual rate of 8 per cent or more of the pot value, up from 42 per cent in 2019/20.
The FCA also revealed that the number of defined benefit to defined contribution transfers received by pension providers fell by 25 per cent in 2020/21, to 30,596.
Just Group group communications director Stephen Lowe said the figures showed the impact of the pandemic on people’s decisions to dip into their retirement money.
If you are thinking about accessing your pension pot, Seven Financial Planning can help you make the right decisions to make the most of your money. We offer a wide range of impartial advice, always tailored to the individual client’s needs and circumstances. Contact us for a free, no-obligation consultation. Tel. 0191 380 4106 or email enquiries@sevenfinancialplanning.co.uk