The financial demands of Christmas do not appear to have sparked additional mass pension withdrawals, according to a recent survey undertaken by YouGov on behalf of wealth manager, Old Mutual Wealth.
Despite early concerns around reckless spending of savings, when asked whether they planned to, or had already withdrawn money from their defined contribution savings to help pay for Christmas, just four per cent of those aged 55 or over said they had.
The overwhelming majority (87 per cent) said they had no plans to access their pension specifically to help pay for Christmas with the remainder (9 per cent) unsure of their plans.
Adrian Walker (pictured), retirement planning manager at Old Mutual Wealth, says: “December is a month when people face many demands on their money, and enticements to spend are all around. So as we approach the first Christmas since the introduction of the new pension rules in April, this research shows the vast majority of people are taking sensible decisions with their pension savings and realise that their pension income is for life, not just for Christmas. This is an excellent barometer of overall behaviour and backs up our own experience that withdrawals are consistently decreasing since a peak in May, just after the reforms, and there has been no discernible increase ahead of Christmas.
“While I would wholeheartedly support someone taking money from savings instead of going into debt at any time of year, the warnings of wholesale frivolous spending of pension cash seem to have been premature and there will be fewer Lamborghinis under Christmas trees this year than some might have expected.
“Personally, I’m encouraged by these findings, as they appear to be evidence that people are planning for sustainable income in retirement and not making rash short-term decisions.
“When looking at taking income from your pension, a good rule of thumb is to make sure you can secure enough income for the basics of living before considering extra spending such as holidays, home improvements, cars and, especially at this time of year, gifts and other presents.”
