There was a "significant" rise in pensions being accessed for the first time in 2023/24, although the number of individuals who accessed their pensions without taking regulated advice has also increased, data from the Financial Conduct Authority (FCA) has found.

The FCA’s Retirement Income Market Data showed that the total number of pensions accessed for the first time increase by 19.7 per cent year-on-year to 885,455 in 2023/24.

Sales of annuities saw the largest growth, up by 38.7 per cent to 82.061, while sales of drawdown rose by 27.9 per cent to 278,977.

The overall value of money being withdrawn from pension pots increased by 20.6 per cent to £52.2bn.

The number of defined benefit (DB) to defined contribution (DC) transfers, meanwhile, continued to fall from 18,080 in 2022/23 to 7,181 in 2023/24.

However, the FCA found that the number of individuals who accessed their pensions for the first time without taking regulated advice continued to increase in 2023/24, as less than a third (30.9 per cent) of pensions accessed for the first time were accessed by people who took regulated advice.

This represents a continued downward trend, falling from 33.4 per cent in 2021/22 and from 32.9 per cent in 2022/23.

“The latest FCA retirement income data for 2023/24 reveals a significant shift in pension access and withdrawals, reflecting ongoing economic pressures and evolving strategies within retirement planning,” said Quilter head of retirement policy, Jon Greer.

“The total number of pension plans accessed for the first time surged by 19.7 per cent, reaching 885,455 compared to 739,652 in 2022/23.

“This substantial increase indicates that more individuals are turning to their pensions to manage their financial needs, likely influenced by the cost-of-living crisis forcing people to dip into their pension pots to supplement other forms of income.

“However, the number of individuals seeking regulated advice before accessing their pensions for the first time continued to decline.

“This ongoing drop suggests that more people are navigating the complexities of pension withdrawals without professional help, raising concerns about the long-term sustainability of their retirement strategies.”

Greer noted that the government’s pension review will aim to address these concerns by evaluating policies and proposing measures to ensure retirees can sustain their income throughout retirement.

“This review is expected to prioritise clearer guidance and support, helping individuals make informed decisions and avoid detrimental financial mistakes,” he continued.

“It’s likely to be aligned with the Advice/Guidance Boundary Review, which aims to examine at the regulatory boundary between financial advice and other forms of support and address this issue.

“This review seeks to ensure that consumers can access the help they need, whether through regulated advice or more general guidance, without facing unnecessary barriers or confusion.

“The ultimate goal is to help more people access some form of assistance before they embark on their retirement strategies, ensuring they make the most of their pots and avoid hugely detrimental mistakes.”

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