Pension pot withdrawals drop 8% as annuity sales plummet: FCA

This was driven by 21% fall in the number of annuities purchased and an 11% fall in the number of full cash withdrawals.

However the total number of pots accessed for the first time is up 9% compared to same period a year ago. Much of the growth in the overall number of pension pots accessed is due to the number of full cash withdrawals, which grew by 18% from the same period last year.

Conversely, the number of annuity sales fell by 16% to their lowest level since the pension freedoms were introduced.

Overall in the six month period, there were 83,687 new drawdown plans compared to 33,561 new annuities, while 150,806 people cashed their whole pension in one go.

The data also shows a fall in adviser use among those making full withdrawals from their pension, from 44% between April and September 2016 to 38%.

Tom McPhail, Head of Policy at Hargreaves Lansdown, commented: "Demand for drawdown is now outstripping annuities by almost three to one; it is clear investors have limited appetite for guaranteed incomes at today’s relatively low interest rates. The worry is that for many people, at least some guaranteed income is extremely important, particularly at older ages. If this trend continues much further we may not have an annuity market at all and that won’t be good for investors."