The latest FCA retirement income data for 2023/24 has revealed a 20% rise in the number of pension plans accessed for the first time between April 2023 and March 2024.

There were 885,455 pension plans accessed for the first time in the period compared to 739,652 in 2022/23, according to the data from the regulator released this morning.

The substantial increase indicates that more individuals are turning to their pensions to manage their financial needs.

Concerningly, the number of individuals seeking regulated advice before accessing their pensions for the first time continued to decline. In 2023/24, just 31% of plan holders took advice, down from 33% in the previous year.

The rise in plans accessed combined with the drop in individuals seeking advice suggests that more people are navigating the complexities of pension withdrawals without professional help, raising concerns about the long-term sustainability of their retirement strategies.

The value of money being withdrawn from pension pots also saw a marked rise. The total withdrawals increased by 21%, climbing from £43,233m in 2022/23 to £52,152m in 2023/24.

After years of declining popularity, annuities made a significant comeback, with sales rising by 39% to 82,061 in 2023/24, up from 59,163 the previous year.

Drawdown products also saw a marked increase in uptake, with sales rising by 28%, indicating a broader trend toward flexible income options in retirement.

The FCA data showed a steep decline in defined benefit (DB) to defined contribution (DC) transfers, which fell from 18,080 in 2022/23 to just 7,181 in 2023/24.

Jon Greer, head of retirement policy at Quilter, shared concerns that the latest FCA retirement income data shows that more people may run out of money in retirement.

He said: “As more people access their pension savings earlier, it becomes increasingly important for individuals to consider the long-term impact of their decisions, particularly as the number of people opting out of advice continues to rise. Many retirees may struggle to ensure their income lasts throughout retirement.”

He added that the success of the new Labour Government ‘s pension review and the Advice Guidance Boundary review will be crucial in helping more people access some form of assistance before they embark on their retirement strategies, ensuring they make the most of their pots and avoid hugely detrimental mistakes.

Nick Flynn, retirement income director at Canada Life, agreed, and added that the Government needs to do all it can to push consumers towards seeking independent financial advice if they are to "make the right choices about funding their retirement needs".