Retirees risk running out of cash

People moving into income-drawdown plans to access their pension funds in retirement risk running out of money too early.

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People moving into income-drawdown plans to access their pension funds in retirement risk running out of money too early, warns broker AJ Bell. Almost half of those with drawdown plans are withdrawing 10% of their savings a year, says AJ Bell, in which case the average pension fund of £118,000 could be depleted after just 12 years. Some 57% of survey respondents aged 55 to 59 those who need their pension funds to last the longest are withdrawing more than 10% of their fund each year, compared with 43% of 60-to-64 year-olds, and 34% of people aged 65 to 69.

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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.