In addition, the FCA data showed many people cashing in very large pension pots in one go, in some cases pots worth hundreds of thousands of pounds.
Again, it is their money to use as they choose, but in the process they would have paid tens of thousands of pounds in tax.
Unfortunately, there is no research or data available to show whether people are making well-informed decisions with their pensions.
Whilst auto-enrolment has been a great success in getting more workers saving for retirement, it hasn’t solved the pension crisis.
The population is ageing; within 20 years around a quarter of the population will be aged over 65 and this trend has been exacerbated in recent years by a falling birth rate.
Since the 1970s, the fertility rate has been below the 2.1 births per mother necessary to maintain a stable population. In recent years it has dropped more sharply, from just under 2 in 2010, to below 1.5 today. This means as the years roll forwards, there will be a smaller working age population paying taxes and buying things, to support a larger and larger retired population.
This presents a huge challenge for public policymakers. It explains why they are so keen to see the capital tied up in the pension system invested into the UK economy to stimulate economic growth, which is the only thing that’ll get us out of the hole we’re sliding into.
Against this backdrop, it wouldn’t be surprising for the next government to take action. This could include increasing the minimum age at which you can access your private pension savings, pushing it up to perhaps age 60; it could mean putting restrictions on taking cash out, such as requiring you to first secure a minimum amount of guaranteed long-term income.
I also wouldn’t be surprised to see Labour imposing some form of increased death taxes on larger pension accounts, such as making pension funds liable to inheritance tax.
Tom McPhail is director of public affairs at financial consultancy the Lang Cat