ABI has revealed that between April 2019 and April 2020, queries from customers about their pension fell by a third (31.9%). In the same period, people choosing to access their pension as a flexible income (drawdown) fell by 42.2%.

The data has also indicated that the number of people taking only a tax-free lump sum has halved (53.1%) in the same time period. Similarly, less people withdrew their pension in one lump sum (30.2%). 

In the same one-year period, ABI found that the number of people buying a guaranteed income for life (annuity) fell by 56.3%.

There was also a fall comparing March 2019 to March 2020, when stock market volatility increased. During this time queries from customers about their pension fell by 3.2%. People choosing to access their pension as a flexible income (drawdown) fell by 15%, the number of people taking only a tax-free lump sum fell by 29% and the number of people withdrawing all their pension in one lump sum fell by a fifth (20%).

Simultaneously, the number of people buying a guaranteed income for life (annuity) fell by (36%).

The fall from March 2020 to April 2020 was bigger than the corresponding change last year.

As the lockdown is eased, experts believe that withdrawal rates will begin to increase due to pent-up demand and as the financial need increases as the furlough scheme unwinds.

The ABI is urging people who are considering accessing their pension to seek impartial financial guidance from Pension Wise or regulated financial advice, and to ask their provider about their options.

Rob Yuille, assistant director, head of long-term savings at ABI, said: “As COVID-19 struck there was a fear in the industry and in government that a pensions panic would hit, with mass pension withdrawals out of fear of stock market volatility and labour market uncertainty. So far, this concern couldn’t be more wrong. Instead customers have been holding off in large numbers.

“The pandemic is a harsh reminder of the uncertainty of how long your retirement might last, what it will look like and what it will cost. More than ever it has shown that when it comes to making decisions on your pension, you should get expert help.”

• Read all of our articles relating to COVID-19 here.