The total amount of withdrawals made using pension freedoms since April 2015 has risen to £25.62 billion, Government statistics show.

People aged 55 and over have benefitted from more choice when it comes to accessing their pension savings from 2015/16.

In 2018/19, 539,000 individuals withdrew £8.18bn in total through flexible payments from pensions - an increase of £1.53bn on the year before.

While more savers are taking advantage of pension freedoms, NFU Mutual warned that those doing so could unintentionally create future inheritance tax problems.

Sean McCann, chartered financial planner at NFU Mutual, said:

"If you take money out of a pension, you're taking it out of a protective wrapper that shields it from income tax, capital gains tax and, crucially in most cases, inheritance tax.

"The protection from these taxes can be passed down through generations too without HMRC taking a large slice.

"Those that can afford to should take money from their ISAs or other investments before they dip into the most tax-efficient of all their assets."

Contact us to discuss pension freedoms.