Over-55s resisted the temptation to take large sums from their pension pots as average withdrawals fell 7% in the three months to 30 September 2020.

Figures from HMRC showed the average amount withdrawn in July, August and September 2020 was £6,700, down from £7,200 year-on-year. 

A total of £2.3 billion was flexibly withdrawn from pensions in Q3 2020, a decline from £2.8bn during the same period last year. 

Withdrawals increased in the three months to September, almost certainly due to financial uncertainty caused by the pandemic. 

The number of over-55s accessing their pension in Q3 2020 actually grew 6% year-on-year to around 347,000, and by 2% on the previous quarter. 

This goes against the grain as the number of over-55s dipping into their pension pots usually peaks at the start of the tax year in Q2, before tailing off in Q3. 

Steven Cameron, Pensions Director at Aegon, said:

“These figures show an unusual reversal in seasonal trends, but lockdown... has led to different behaviours.

“There have been concerns that over-55s facing financial difficulties during Covid-19 would look to their [private] pensions to provide a short-term boost and deplete their pension pot when fund values remain depressed. 

“Pensions are designed to provide an income throughout retirement and reducing the amount of income withdrawn during a period of downturn could be important for the longevity of the pension pot.

“Those concerned over withdrawing from their pension in a volatile market should seek professional financial advice.”

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