Pension savers withdrew over £91 billion from their retirement pots in the year ending 31 March 2026, a jump of 22% compared with the previous year.
The latest figures from the Financial Conduct Authority showed the proportion of pots accessed with a value of £250,000 or more also increased, reaching 8.6% compared with 7.2% in the previous year and 4.8% in the year ending 31 March 2024.
In total, the number of pension plans accessed for the first time increased by 7.4% to 1,047,008 in the year ending 31 March 2026, compared with 974,990 in the previous year.
Industry commentators said the sharp rise in withdrawal values will raise question marks over retirement adequacy.
Rachel Vahey, head of public policy at AJ Bell, said: “There was a surge in the amount of pension money accessed last tax year as it surpassed £91 billion, an astonishing 22% increase compared with the previous year – and a truly staggering doubling on the total three years ago.
“The fact that more people now have defined contribution pension pots is a factor. However, the concern is that people aren’t making decisions based on what’s best for them, but because they are worried about rumours of changes to pension tax incentives from the government or planned changes in tax rules.
“Unless people make decisions based on their long-term retirement strategy, they could find themselves in later life having to rely on a much smaller retirement income than they wanted or anticipated.”
The figures showed the number of plans entering drawdown increased by 10.5% to 401,137 in the year ending 31 March 2026 compared with the previous year, while 64.5% of those who entered drawdown took a pension commencement lump sum, up from 61.9% in the previous year.
Vahey said many people are now also starting to consider what the decision to bring unused pensions into the scope of inheritance tax means for them in practice and the rise in the number of people choosing drawdown could signal that they’re planning to spend or gift at least part of it as a way of mitigating their potential IHT liability.
Maurice Titley, commercial director of data and dashboards at Lumera, said: “The rise in the proportion of larger pension pots being accessed, alongside the increase in people taking a Pension Commencement Lump Sum, highlights the importance of ensuring savers have the right support when making decisions about how and when to access their retirement savings. These choices can have significant implications for tax and the level of income available throughout retirement.
“As more people reach retirement with defined contribution savings, initiatives such as Guided Retirement and Targeted Support are likely to play an important role in supporting savers to achieve better outcomes. However, both initiatives will require providers to be able to leverage data at scale, whether that is to assign members to appropriate default pathways or provide more targeted guidance at the point they access their pension.”
The FCA said 30.8% of pension plans accessed for the first time in 2025/26 were accessed by plan holders who took regulated advice, broadly unchanged from 30.4% in the previous year.
