The FCA has reported a sharp rise in pension withdrawals, with total amounts rising by more than a third in 2024/25.
Data covering April 2024 to March 2025 shows 961,575 pension plans were accessed for the first time, up 8.6% on the previous year (885,455).
Drawdown sales recorded the largest growth, climbing 25.5% to 349,992 from 278,977 in 2023/24. Annuity sales rose 7.8% to 88,430, while the overall value withdrawn leapt 35.9% to £70.9bn.
Just 30.6% of plans were accessed with regulated advice, down slightly from 30.9% the year before.
Defined benefit to defined contribution transfers also continued to fall, dropping to 6,418 from 7,181.
Commentators suggested speculation over tax changes, rising living costs and inheritance planning may have driven behaviour.
Nucleus technical services director Andrew Tully warned that policy uncertainty “drives poor customer outcomes” and called for a more stable savings framework.
He added: “The increase in the number of people accessing their pension is likely to reflect the government’s moves to include pensions within IHT, and wider rumours around the future of the tax-free lump sum. This has caused many people to access tax-free cash and income, potentially to gift to family or shelter from IHT.”
He said drawdown remains the dominant solution but expressed concern about savers entering without advice.
Quilter head of retirement policy Jon Greer also flagged risks from unsustainable withdrawals: “Nearly seven in ten people are making complex decisions without professional help, which risks leaving many without adequate income later in life.”
Broadstone’s Rob Hillock added that rumours about inheritance tax and tax-free lump sums “may have encouraged more savers to front-load withdrawals.”
The FCA has collected retirement income data since the introduction of pension freedoms in 2015.
