Pension withdrawal rates fall amid increased economic uncertainty

The average quarterly withdrawal amount by PensionBee customers has declined by over 10 per cent year-on-year, from £13,132 in Q1 2021 to £11,676 in Q1 2022, the provider has revealed.

PensionBee attributed the fall in withdrawal amounts to record high inflation rates and recent stock market volatility.

The analysis also revealed that both male and female savers opted to keep more of their pension invested, as their withdrawal rates decreased by 10 per cent and 12 per cent respectively.

PensionBee found that, on average, male savers’ quarterly withdrawal amounts fell from £14,261 in Q1 2021 to £12,783 in Q1 2022.

However, their withdrawal amounts remained larger than those of female savers, whose withdrawals fell from £9,809 to £8,602 over the same period.

Despite the recorded decrease in average quarterly withdrawal amounts, the proportion of customers aged 55 and over who made withdrawals remained largely unchanged from 2021 to 2022, falling by 2 percentage points.

PensionBee CEO, Romi Savova, commented: “Record high inflation rates and recent stock market volatility have forced retirees to evaluate how they interact with their savings, impacting when and how much they withdraw from their pension.

“Given these macroeconomic factors, it seems sensible that savers have adopted a more cautious withdrawal approach as they expect their money to stretch further for longer. This wider trend of saving more and spending less could also indicate that many pension savers are preparing for an impending cost of living crisis.

“As always, timing is crucial with pensions, so I would encourage all savers to make an informed decision on when they choose to access their savings, as this can have a significant impact on their overall retirement income.”

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