“It’s time that this little-known complex rule is increased to £10,000 allowing people to rebuild their pension savings and getting their retirement plans back on track."
In addition, Andrew Tully, technical director at Canada Life, said this is not a temporary spike and sets the expectation that the cost of living crisis will be with us for years to come as people look to their pensions as a bank account to support their day-to-day living costs.
“This is understandable behaviour as people look to make ends meet but we need to remember that pensions are already likely to be stretched over a longer lifespan than previous generations and any withdrawals will need to be sustainable over this period,” he said.
“Savers who choose to access their pension pots should also be aware of the MPAA sting in the tail, which significantly limits how much you can continue to contribute to your pension should you wish to top-up any withdrawals.”
sonia.rach@ft.com
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