HMRC published updated personal pension statistics

HMRC has published updated statistics relating to private pensions. The statistics include:

  • the number of members and value of individual contributions to personal pensions;
  • the estimated cost of pension income tax and National Insurance contribution relief;
  • statistics on annual allowance and lifetime allowance charges; and
  • statistics on taxable flexible payments from pensions.

Some of the takeaways from this data includes:

  • The estimated cost of pension income tax and national insurance contribution relief has increased once more (the headline figure for relief for both sources, net of tax paid by today’s pensioners, is given as £48.2bn up from £44.5bn in 2019/20).
  • There was an 11% increase in the total of lifetime allowance charges paid for 2020/21, but a 23% decrease in contributions/accrual incurring annual allowance charges; (probably due to the 2020 Budget easements in the thresholds above which the annual allowance is tapered below the standard £40,000 allowance).
  • Pension withdrawals surged at the start of 2022 as the cost-of-living crisis forced savers to dip into their retirement pots, new HMRC data shows.
  • A staggering £3.6 billion of flexible pension withdrawals were made between 1 April and 30 June 2022 – a 23% increase compared to the same period in 2021.
  • Over 500,000 people accessed their pension in the second quarter of 2022, with the average withdrawal over the period standing at £7,000.
  • Across the 2021/22 tax year, £10.6 billion of flexible withdrawals were made by savers, up from £9.6 billion in 2019/20.

Find about more about pensions and taxes by reading our article, ‘How to be tax efficient with your pension contributions’.

You can also watch back our webinar from earlier this year, ‘Planning a comfortable, not taxing retirement?’.

If you have any questions about your personal pension, get in touch with one of our experts today. The information in this article is correct as of 26/10/2022.