Nearly half of pension pots were accessed without advice or guidance being sought last year, according to the latest retirement income data from the Financial Conduct Authority (FCA).
The FCA's 2018/19 report showed that 37% of plans were accessed by plan holders who took regulated advice, and 15% by plan holders who did not take advice but received Pension Wise guidance. The remaining 48% of plan holders did not seek regulated advice or guidance.
Between 1 April 2018 and 31 March 2019, 645,000 pension pots were accessed to buy an annuity, move into drawdown or take a first cash withdrawal. Of those, 350,000 pension pots were fully withdrawn the first time they were accessed, 90% of which were less than £30,000 in value.
The FCA's analysis showed that taking advice generally depended on the size of the pension pot. While 70% of consumers with pot sizes of £100,000 and over sought regulated advice, only 20% of those with less than £10,000 in pension savings did. The FCA said it is concerned with the reduction in the number of people accessing advice, with 34% taking no advice whatsoever, up from 31% the previous year.
Commenting on the matter, Keith Richards, CEO of professional body the Personal Finance Society (PFS), said: 'It is deeply concerning how many people are pulling all their cash from their pension pots without advice or guidance, and the potentially catastrophic poor outcome for thousands of consumers must be acknowledged as a failing of government and regulator to deliver clear guidance for the public.
'The PFS would like to see the government and the FCA do more to make sure providers are signposting guidance services and advice, and explaining the potential ramifications if you don't seek assistance.'