People accessing their pensions on the rise
During Q4 2020, more people accessed their pensions and more money was withdrawn, compared to Q4 2019. A total of £2.4bn was withdrawn from pensions in Q4 2020, a 6% increase from the £2.2bn withdrawn in Q4 2019.
HMRC data indicates that 360,000 people accessed their pensions in the three months to 31 December 2020, up 10% from the same period in 2019, meaning the average amount withdrawn per individual was lower*.
There is usually a slight decrease in the number of savers accessing their pensions in the final quarter of the year, meaning that this change in behaviour is potentially a result of the pandemic. With unemployment and redundancies rising, many people may be feeling the need to dip into their pensions, for relatively small amounts in some cases.
Weigh your options carefully
Taking money from your pension may seem attractive in the current climate, but it’s not without its risks. We can help you weigh up your options so that you can make an informed decision.
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
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