The total value of taxable payments withdrawn flexibly from pensions was £22.4bn in 2025/26, a 20% rise year-on-year, according to data from HMRC.
In Q1 (January to March 2026) £5.9 billion of taxable payments were withdrawn from pensions flexibly by 770,000 individuals via 1.9 million payments.
The average taxable withdrawal per person was £7,700 in this period, an 18% increase in the value of payments withdrawn compared to the same quarter in 2025, and a 15% increase in the number of individuals withdrawing.
In 2024/25 £18.6bn was withdrawn and in 2023/24 £15.3bn.
In total £124.7bn of taxable payments have been withdrawn flexibly from pensions since Pension Freedoms were introduced in 2015.
David Brooks, head of policy at pensions consultancy Broadstone, said the increase in money being withdrawn during the first quarter of this year may indicate that the cost of living crisis is leading to savers accessing more of their pensions earlier.
He said: “The continued growth in taxable pension withdrawals is to be expected given the growing number of people reaching retirement with defined contribution pension pots.
“However, the 18% annual increase in the value withdrawn during the first quarter of 2026 compared to the previous year is striking and suggests that financial pressures may be encouraging savers to access more of their pensions.
“The true concern is that we have little conclusive evidence to gauge how savers are accessing their pensions and whether they are doing so in a sustainable way. Pension Freedoms provide valuable flexibility but inevitably increase the risk that savings are depleted too quickly, particularly where people underestimate how long their retirement may last.”