Seven in 10 people taking flexible payments are below age 65, according to new figures released by the Department for Work and Pensions, raising concerns about retirees running out of money.
The figures show that 2.6 million people have so far taken a flexible payment from a pension since 2015 and 43% of them were aged under 60, with a further 28% aged between 60-64.
Of the £83 billion taken in flexible payments since inception in 2015, nearly two thirds (65%) has been taken by those aged under 65.
Stephen Lowe, group communications director at Just Group, said: “Money taken from pensions early is obviously not going to be available when people are older. These figures show that early access to pensions is very common, usually long before State Pension age. Most people need to manage their pension withdrawals very carefully to ensure they don’t run out and these figures do not inspire confidence that is happening.”
Lowe said that while giving people access to pension money at age 55 gives them greater flexibility to deal with events such as redundancy or illness, having access to a large pool of cash can be a temptation for people focused on the short-term.
“Anyone thinking of accessing cash early needs to think about the long-term consequences. Professional advice can help people think about the future while those approaching retirement should take the free, independent and impartial guidance offered by Pension Wise which gives a good overview about financial decisions for later life.”
