Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Home Finance Pension withdrawals soar by 20% in 2021 as cost of living starts to bite

Pension withdrawals soar by 20% in 2021 as cost of living starts to bite

by uma


  • £8.3bn was flexibly withdrawn from pensions between April and December 2021 – a 19% increase on the same period in 2020.
  • 648,000 people accessed an average of £12,800 during this period.
  • This follows an ongoing trend of more people accessing their pension but taking lower amounts out on average.
  • A total of £53bn has been accessed flexibly since Pension Freedoms were introduced.

The latest flexible payments from pensions data has been released Commentary for Personal and Stakeholder Pension Statistics: September 2021 – GOV.UK (www.gov.uk)

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“We’re set for a record year of pension withdrawals as the cost-of-living bites, and we dipped in for a fifth more cash in the first part of the tax year. But this isn’t necessarily anything to worry about just yet because we’re not draining our pots dry.

We saw a significant increase in the amount being withdrawn from pensions between April and December 2021 with a whopping £8.3bn being accessed. By the time the final quarter’s data comes through, this should be by far the biggest year for pension withdrawals. 

This could be down to several factors. The pandemic no doubt put pressure on people’s finances and there is also the chance that soaring inflation is forcing more retirees to tap into their pensions to meet the spiralling cost of living.

While the amount of money being accessed has gone up, this is not necessarily a cause for concern. There’s no indication retirees are draining their funds – the average amount taken was £12,800 so far this tax year. This continues a downwards trend in the average amount being accessed though we will see if the ongoing cost of living crisis alters this in the coming months.

Appetite for pension flexibilities remains undimmed and the ability to access their pensions in this way is likely to be welcomed by older people in these challenging times.”