Experts have welcomed figures from the Association of British Insurers (ABI) showing people are making informed decisions about their retirement incomes.
Investors have been taking their time to make decisions and not blowing their savings according to Hargreaves Lansdown head of retirement policy Tom McPhail (pictured above).
Figures revealed 57% of pots had seen withdrawals of 1% or less during the last quarter this year.
The ABI data reinforces evidence from elsewhere about changes in people's behaviour concerning their savings.
"We have seen some fundamental changes in behaviour, with fewer annuities being sold but for higher values and more drawdown plans being used, with lower average values; these are both positive developments," said McPhail.
The drawdown market was the big winner with 90,700 products netting £6.1bn, with the average investment almost £67,500.
The data also shows many smaller pension pots are being cashed out as a single lump sum which is "probably a good thing as it is likely to be more efficient" than having an annuity pay out a tiny sum, McPhail added.
Royal London pensions specialist Fiona Tait suggested the income tax levied on pension withdrawals beyond the 25% lump sum might be making people think hard about using pension freedoms. "This tax ‘brake' acts as a useful reality check to remind people to think about how to make best use of their pension unlike, for example, the incoming Lifetime ISA, which will allow people to withdraw all of their savings without penalty."
However, the ABI research indicates a minority of investors may be running down their savings too quickly.
Intelligent Pensions head of pathways Andrew Pennie said the ABI is right to be concerned about this. "While they [ABI] highlight the minority taking more than 10% withdrawals, anyone taking over 4% in the current economic conditions could well be putting excess pressure on their pension fund to deliver a sustainable income."
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