Be careful with your pensions freedom

Savers are using the pensions freedom rules to dip into their retirement funds at an alarming rate, says David Prosser.

913_MW_P31_Pensions

Leap free, but take precautions
(Image credit: This content is subject to copyright.)

The average amount that savers with income-drawdown plans withdrew from their pensions rose sharply last year, prompting new concerns that people could run out of money in retirement. The average saver with an income-drawdown plan took out 5.9% of their pension fund during the 2017-2018 financial year, up from 4.7% in the previous 12 months, says the Financial Conduct Authority (FCA), the City regulator.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
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.