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Sunday, May 26, 2024

Brits taken £70bn from pensions in decade since ‘freedom’



A decade on from George Osborne’s ‘pension freedoms’ Finances bombshell announcement in 2014, the newest HMRC information confirmed that £70bn of retirement money has since been accessed flexibly by Brits.

The reforms have been carried out in April 2015 and ditched restrictions that beforehand utilized to ‘drawdown’ and ushered in a brand new period of freedom and selection for savers aged 55 and over.

Tom Selby, director of public coverage at AJ Bell, stated the change was arguably probably the most important pension tax reform in nearly 100 years and a reform which has revolutionised the retirement revenue market.

He stated: “Brits can now construct a retirement revenue plan to swimsuit their wants, probably combining the safety of an annuity with the pliability of holding cash invested by way of drawdown.

“Reforms to pensions dying advantages have additionally been a recreation changer, permitting individuals to move on their pensions utterly tax-free to family members in the event that they die earlier than age 75.”

He stated that enhancing the assist accessible to savers and retirees is crucial. “The joint evaluate being carried out by the Treasury and FCA on the recommendation steering boundary is central to this, with the proposed ‘Focused Assist’ regime probably enabling corporations to supply extra helpful steering to all.

“Selling the advantages of regulated recommendation, which stays the gold normal on the subject of serving to individuals make good monetary selections, can be essential.”

The corporate has give you ten key numbers that inform a narrative about retiring in Britain since 2015:

  1. £72.2bn – The full worth of pensions accessed ‘flexibly’ for the reason that pension freedoms have been launched in April 2015. (Supply: newest accessible HMRC information)
  2. 705,666 – The variety of pension pots accessed for the primary time in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  3. 205,641 – New drawdown insurance policies entered into however not totally withdrawn in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  4. 68,514 – Variety of annuities bought in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  5. 4% – Proportion of plans accessed for the primary time the place plan holders took regulated monetary recommendation in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  6. 40% – Proportion of normal drawdown revenue funds withdrawn at a price of over 8% of the pot worth in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  7. 6% – Proportion of individuals aged 55+ who have been saving in an outlined contribution (DC) pension in Might 2022 who stated they’d totally encashed the pension, or taken out a lump sum, to cowl day-to-day bills. (Supply: FCA Monetary Lives Survey)
  8. 26,619 – Whole variety of outlined profit (DB) to outlined contribution (DC) transfers carried out in 2021/22 (the newest 12 months official information is obtainable). (Supply: FCA information)
  9. £1.17bn – Sum of money reclaimed by savers overtaxed on their pension withdrawals since April 2015. (Supply: AJ Bell evaluation of HMRC information)
  10. £3,216 – Common reclaim worth within the newest quarter (This fall 2023). (Supply: AJ Bell evaluation of HMRC information)

 



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