Make sure your pension savings outlast you

Thousands of retirees have taken advantage of the new pensions freedom rules. But as David Prosser explains, it's vital to make sure you don't run out of funds.

Thousands of pension savers taking advantage of the new pensions freedom rules may be at risk of running out of money during retirement because they're drawing too much income from their pension funds. Data from the Association of British Insurers (ABI) suggests that while many savers with income drawdown plans are managing their money carefully, significant numbers are being less prudent.

The ABI said 57% of savers with such plans withdrew less than 1% of their funds during the first quarter of the year. But many savers took out substantially more: 9% almost 7,500 savers made withdrawals of more than 4% during the first quarter, with almost half of those savers withdrawing more than 10%.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.