Savers accessing defined contribution (DC) pension pots for the first time rose to an all-time high just before the coronavirus pandemic, Just Group says.
This comes on the back of analysis which found one in ten UK workers have now paused their pension contributions because of the Covid-19 pandemic, and research which showed the majority of savers in a DC workplace scheme were concerned about funding retirement post-coronavirus.
Just Group found DC pensions accessed for the first time rose to a record level of 673,831 at the end of the 2019/20 financial year; most were taken without regulated advice or guidance.
Group communications director Stephen Lowe said: "Dipping into pension money is becoming more popular but most people are shunning the professional support that is available to help them make good choices, even when that support is free."
This comes after recent Financial Conduct Authority (FCA) figures showed a rising trend for people taking cash from a pension and not using free and independent guidance or regulated advice.
The FCA found the number of DC pensions accessed for the first time in 2019/20 was up 3% on 2018/19 and the highest number in the five years since the introduction of the pension freedoms.
Lowe continued: "An entitlement to free, impartial and independent guidance was a key part of the 2015 reforms to help pension savers navigate the more complex environment, but usage remains far too low.
"Guidance enhances people's understanding of the options available to them and develops confidence to make better choices and the insight to avoid scams."
A significant rise in pensions scams has been recorded across the UK this year as the economic effects of Covid-19 on the job market continue to place savers under financial pressure.
Aims to improve DC saver outcomes remain on the regulatory horizon however, with the Department for Work and Pensions having launched its consultation on DC investment opportunities and consolidation last month.
The Work and Pensions Committee is also investigating the prevalence of scams in the industry in the first of its three-part inquiry into the success of pension freedoms over its first five years.
The premise of auto-enrolment (AE) as a tool to boost both short- and long-term financial resilience will face its first true test as the effects of Covid-19 continue to play out, says Nest.
Salvus Master Trust is set to replace the Ascot Lloyd Pension Scheme, which exited the market last year after ten years as master trusts faced tough hurdles to become authorised.
The government must take radical and immediate action to stop small pension pots undermining the success of auto-enrolment (AE), Now Pensions says.
Defined contribution (DC) pensions are showing positive signs of market recovery after dramatic falls in the number of expected retirements this year due to the ongoing coronavirus pandemic.
Transfers between defined contribution (DC) schemes must continue to be prioritised by trustees during the Covid-19 pandemic, The Pensions Regulator (TPR) warns.