Pension withdrawals total £5.7bn in 2017

Pension withdrawals total £5.7bn in 2017

Consumers withdrew a total of £5.7bn from their pensions through drawdown or cash withdrawals in 2017, new figures from the Association of British Insurers (ABI) have shown.

In its key facts document about the UK insurance industry in 2017, published today (December 20), the professional body also revealed that £9.2bn was invested in drawdown products through 102,000 new contracts, amounting to an average investment of almost £90,000.

The figures compared with £6.5bn invested and 85,000 contracts sold in 2016.

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Meanwhile 6.7 million annuity contracts were in force in 2017, with payments made totalling £14.7bn.

There were 69,000 annuity sales in 2017, a decrease from the 75,000 sales in 2016. The total value of annuity sales had increased slightly though to £4.4bn, with 48 per cent of savers buying it from existing provider.

Overall, £16bn was paid to consumers through investment and savings product contracts.

ABI’s figures also showed that general insurance and long-term savings companies in the UK paid out £153m every day during 2017, which throughout the year was more than the entire GDP of Croatia.

At the same time, the ABI analysis showed the industry made a contribution to the UK economy worth £29.5bn and paid close to £12bn in taxes.

Huw Evans, director general of the ABI, said: "Millions of people and businesses turn to insurers in their time of need to deal with unexpected financial shocks. Our country’s SME sector can thrive because of the safety net provided by our world-leading insurance sector.

"This data reminds us that insurers and long-term savings providers pay hundreds of millions of pounds every day to get things back on track and to support people in their retirement. Our sector is helping Britain thrive and remains a key part of a prosperous and financially resilient economy."