This is sometimes called phased or partial drawdown. You can take up to 25% of each amount you move from your pot tax-free and place the rest into pension drawdown. You can also move your pension pot gradually into income drawdown. If you take out too much money too soon you could run out of money. Remember, this income isn’t guaranteed as investments can go down as well as up. It’s important to think about your investment choices and when you might want to make withdrawals. You should choose funds that match your planned withdrawals and attitude to risk. You’ll have to decide where to invest the 75% of your pension pot you move into drawdown. The amounts you withdraw after taking your 25% tax-free lump sum will be taxable as earnings in the tax year you take them. You can usually choose to take up to 25% of your pension pot as a tax-free lump sum when you move some or all your pension pot into drawdown. The number of firms that received a DB to DC pension transfer also fell from 63 to 57.You might be able to set up a drawdown arrangement with your current provider, or you might need to transfer to a new provider in order to use your pension pot flexibly. Even if your current provider offers this option, you should still shop around other providers to make sure that you’re making the most of your pension money.īefore you transfer, check you won’t lose any valuable guarantees or have to pay charges. The number of DB to DC transfers continued to fall from 30,596 in 2020/21 to 26,619 in 2021/22.33.4% of plans accessed for the first time in 2021/22 were accessed by plan holders who took regulated advice (up from 32.7% in 2020/21).40% of regular withdrawals were withdrawn at an annual rate of over 8% of the pot value (43% in 2020/21). The overall value of money being withdrawn from pension pots rose to £45,638m in 2021/22 from £37,432m in 2020/21.Uncrystallised funds pension lump sums (UFPLS) saw the biggest increase of 28% from 28,305 in 2020/21 to 36,274 in 2021/22. All products saw an increase in 2021/22.Total number of pension plans accessed for the first time in 2021/22 increased by 18% to 705,666 compared to 2020/21 (596,080).Total value withdrawn by Pension Commencement Lump Sum (PCLS) and by all fully encashed plans.Number of defined benefit (DB) to defined contribution (DC) pension transfers received.Sources of business for retirement product providers.Use of advice when purchasing retirement products.Number of plans where the plan holder made a regular or ad hoc partial withdrawal.Numbers and types of pension plans accessed for the first time.Find out more about the source of the data. Given the change in the reporting population, we advise users to be careful if comparing this to data before April 2018. We started collecting data from all regulated firms that provide retirement income products from 1 April 2018. The data for these periods was initially drawn from a representative sample of approximately 50 firms. Previously published data up to March 2018 is also included in separate tables. The data enables us to monitor developments in the market, for example, to gain insights into what action consumers take the first time they access a pension pot. We have collected data on the retirement income market since April 2015.
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