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week to Friday 25 September 2026
A record £22.1bn of tax-free cash was taken from pensions in the year to March. That's up 20% on the year before, and almost double the figure two years ago.
Here are five things that happened in pensions this week that you need to know about.
On Thursday the Financial Conduct Authority published its annual retirement income data, covering the year to the end of March.
Steve Webb of Lane Clark & Peacock said uncertainty about government policy on tax and pensions "seems to have driven very high levels of withdrawals". Fidelity's Jemma Slingo said: "Taking tax-free cash just because you're scared the rules might change could hurt your retirement in the long-term."
We've independently analysed the FCA's underlying data, and there are some things worth noting that weren't covered in the reporting.
Adding together tax-free lump sums, regular income, one-off withdrawals and pots cashed in, the total comes to around £49bn for the year, not the widely reported figure of £91.2bn.
That £91.2bn is the total value of pots accessed for the first time. Most of it moved into drawdown, where it remains invested.
The FCA data shows whether people had regulated advice, free guidance or neither when they accessed a pension for the first time. The share with neither advice nor guidance was:
For pots cashed in completely, the share with neither advice nor guidance has risen from 62% in the year to March 2019 to 70% last year.
For annuity purchases, it was between 41% and 45% in the four years to March 2022, and between 49% and 57% in each year since. That's while annuity rates are at an 18-year high.
Which? reported on Wednesday that annuity rates are at an 18-year high.
A healthy 65-year-old with £100,000 can buy a guaranteed income of £8,155 a year from Scottish Widows, or £8,120 from Canada Life. Two years ago the equivalent was around £7,100. In February 2023 it was £6,600.
Which? says the difference is worth nearly £30,000 over 20 years, and puts the rise down to gilt yields. Fifteen-year gilts reached 5.7% at the start of September, a 20-year high.
In the Guardian this week, columnist Gaby Hinsliff argued that the pensions triple lock should be broken.
The triple lock, introduced in 2011, raises the state pension each year by the highest of inflation, average earnings growth or 2.5%. Hinsliff writes that it has already cost around three times what the Treasury originally expected, and that the Office for Budget Responsibility reckons it will cost more than £15bn a year by 2030. A 3.9% rise is due next year.
She cites YouGov polling showing two thirds of Britons, and 70% of over-65s, want to keep the triple lock. She also cites Resolution Foundation figures showing pensioner benefits rose by £900 in real terms between 2010-11 and 2024-25, while benefits for children and working-age people fell by £1,400.
She also raises the option of keeping the triple lock in name, but taxing away the increase for wealthier pensioners, comparing it with the changes to child benefit for higher-rate taxpayers.
It is an opinion piece. The triple lock remains government policy.
Under the Pension Schemes Act, workplace schemes will have to offer members a default way of turning their pot into a retirement income.
The Institute and Faculty of Actuaries asked the Behavioural Insights Team to test the options. It found that defaults which need members to keep making decisions later in life risk being neglected, as inertia increases and cognitive abilities decline.
The research favours what's called "flex and fix", which means flexible drawdown early on with an automatic switch to a guaranteed income later. Its other preferred option is retirement collective defined contribution (CDC) schemes. These pool members' pension savings and investments, then use the collective fund to pay members a regular retirement income for life.
It also points to the Pensions Commission's finding that three quarters of defined contribution savers over 40 have no plan for how they'll access their pension.
The Society of Pension Professionals, which represents firms that provide pension advice and services, published a paper this week on pensions and the self-employed. It's called The Missing Millions.
The paper cites the Pensions Commission's interim report, which found that just 4% of wholly self-employed workers are saving into a pension.
The paper says automatic enrolment works for employees because saving is the default. The self-employed have to choose a provider, decide how much to pay in and set up payments themselves, often on irregular incomes, and with no employer contribution.
It sets out options rather than a single recommendation:
The paper asks the Pensions Commission to prioritise the issue.
A record £22.1bn of tax-free cash was taken from pensions last year. The cash that actually left pensions was around £49bn, not the £91.2bn that made the headlines. Seven in ten people who cashed a pot in completely did so with neither advice nor guidance. Meanwhile annuity rates are the best they've been in 18 years.
Whether taking your tax-free cash makes sense depends on the rest of your plan: your other income, your tax position and when you want to stop working. That's what Calculate My Pension works out. It's the only UK tool I know of that gives you an affordable retirement age rather than a projected pot value, and it's free to try.
Back next week.
This is general information, not financial advice. The £49bn cash-paid-out figure is our own sum of FCA Tables 7, 9 and 18 and may include small overlaps. The Guardian article is an opinion piece; the triple lock remains government policy.
The Pensions Report. Every Friday, from Calculate My Pension. See all reports.
