The proportion of pensions being drawn down at 8% or over has hit its highest recorded level for pots of all sizes, according to analysis of the latest FCA data.

Drawdown at 8% is considered nearly twice the rate considered safe and sustainable.

Nearly half, 45%, of all pension pots are being withdrawn at 8% or higher, according to the analysis by retirement specialist Broadstone.

It marks the highest proportion recorded and is up two percentage points from 2023/24.

The picture was replicated across all sizes of pension pot, the firm said, with increases of at least two percentage points in every category. More than a third, 34%, of pots between £100,000-£249,000 and one in 7, 14%, of those larger than £250,000 were also being drawn down at 8% or higher.

David Brooks, head of policy at Broadstone, said: “The data is cause for alarm in the sheer number of pots that are being drawn down rapidly by pensioners.

“While the data does not tell us whether these are retirees’ main pensions that they will rely on for retirement income, it is still startling to see such high numbers rising pretty consistently over the past eight years.”

He said the data highlights current withdrawal behaviour but it does not capture how the rate of access evolves over the long term. Some individuals may be choosing to front-load income in early retirement or meet temporary financial needs, so the headline figures need not imply a permanent, year-on-year pattern. The rising proportion does, however, suggest that this is a trend worth closely monitoring, he warned.

Mr Brooks said: “With pension freedoms just a little over 10 years old, we have little to no tangible evidence around how people are managing their pension savings deep into retirement. This data raises the very real risk that many people are depleting their savings unsustainably and risk facing serious financial challenges later on in retirement.”