Pensioners adopting a prudent approach


Back in April 2015, when the new pension rules were introduced, fears were expressed in some quarters that pensioners would empty their pension pots and splurge their cash on extravagant luxuries such as Lamborghinis.

However, this simply didn’t happen to any great degree. Whilst the total value of pension withdrawals made since April 2015 is over £25bn, the average withdrawal made between July and September 2018 was £7,597, the lowest level recorded by HMRC since their records began four years ago2.


This prudent approach may be based in practicalities. Taking large amounts of cash out of a pension can give rise to a hefty tax bill, so many were probably deterred by the thought that they would end up in a higher tax bracket. In addition, market volatility may have made pensioners more cautious and anxious to preserve their savings; after all, we would all like to think that our wealth will last as long as we do. Taking decisions about pensions can be difficult; professional advice will help you maximise the benefits of the current pension rules.

2HMRC, April 2019

A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.