Half of all pension savers chose drawdown income in the year to April, according to financial planning software business EValue.
Pension drawdowns are becoming an increasingly popular choice among men, women and are even the prefered choice among younger savers.
Half of all pension savers chose drawdown income in the year to April, according to financial planning software firm EValue, which studied the choices of over 86,000 retirement savers over the period. This was a one per cent rise on the previous 12 months.
The fourth annual Pensions Freedom Index found 36 per cent of pensioners chose a traditional annuity, 4 per cent down on a year ago. While 14 per cent chose to take all of their earnings as a single lump, a 3 per cent rise on a year ago.
The ability to drawdown on pension earnings was introduced by the then chancellor George Osborne in April 2015, leading to fears that large numbers would drain their funds to spend the cash on luxury holidays or sportscars.
However, EValue said: “Across the industry, pension providers have rolled out guidance tools and education pieces to help their customers make the best decisions in the face of these new choices.”
An annuity puts the bulk of a new pensioner’s cash into a guaranteed fixed income product. Drawdown products move cash into one or more flexible income funds. Or, pensioners can opt to take all of their savings as a single cash payment.
Overall, there was little difference between the favoured pension options between the sexes, with 49 per cent of men choosing drawdown over the year to April, and 47 per cent of women doing the same, according to the survey.
It also found this was the favoured option among younger savers. It said that 51 per cent of Baby Boomers (over 55 years of age) preferred drawdowns, as did 51 per cent of Gen X (40-55 years), 46 per cent of Millennials (25-40 years) and even 44 per cent of Gen Z (10-25 years) savers.