Average pension withdrawal halves to £9,700 in Q3

The number of individuals making withdrawals has almost doubled from 81,000 in Q3 2015 to 158,000 in 2016.

However the average amount withdrawn has halved from £18,600 in Q2 2015 to £9,700 in Q3 2016.

In total since the introduction of the pension freedoms, people have flexibly accessed over £7.65 billion of their money through 1.1 million payments.

Steven Cameron, Pensions Director at Aegon, commented: "We are seeing a growing trend of people accessing their pension pots under the pension freedoms with the number of people accessing their money doubling and the value of savings accessed up £370m compared against the same time last year.

"The April 2015 pension rules have given retirees this freedom, but hand in hand with this comes greater complexity as well as personal responsibility. Longer life expectancy and rising inflation pose a real threat to retirement income, and without careful planning, there is a risk those drawing too heavily on their retirement pots could run out of money. Our own research showed that this is already a concern for people, with three in four (76%) people aged between 65-74 expressing worry about running out of money in retirement.

"Making savings last can be a difficult balancing act, but products that mitigate against the risk of being left penniless, such as drawdown with guarantees, are becoming an increasingly important part of the post-freedoms market. Retirement is increasingly varied as a life stage, and the ability to draw an income more flexibly, adjusting when needs arises is increasingly crucial. Advisers play an important role in highlighting the variety of new options available, and how best to use these to meet the more diverse demands of later life.”