Savers tap in to their pensions as Covid-19 saps cash

Covid-19 hardship is leading record numbers of people to dip into their pension savings early.

Record numbers of savers made withdrawals from their pensions during the first quarter of the year, new figures show, prompting warnings that the pandemic may be forcing people to dip into pensions cash.

Some 348,000 savers withdrew £2.5bn from their pension funds under the pension freedom reforms between January and March, new data from HM Revenue & Customs shows, with pension advisers warning of potential adverse impacts on people’s tax bills and long-term financial planning.

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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.