"Our recent research shows just how risky it can be to enter drawdown without advice, particularly when determining a sustainable income which will last a lifetime"
Though the proportion of advised full withdrawals increased six percentage points between the second and third quarter of last year, only 47% of consumers had gone through a planner to take their whole pot.
Full withdrawals rose from 62,300 in Q1 2016 to 88,800 in Q2 and 79,900 in Q3 (the latest available data).
Although the percentage of retirees taking advice has also increased - from 29% in Q1 to 47% in Q3 - the highest levels of adviser use continued to be for customers going into drawdown at 65%.
Additionally, the use of regulated advisers by customers purchasing annuities is on a downward trend (33%). The FCA said "changes in this percentage are quite influential over the total advice proportion across the sector because drawdowns provide the second largest volume of new pension access".
53% of pensions with Guaranteed Annuity Rates were not taken up during April to September, compared with 61% during January to March 2016, 63% during October to December 2015 and 68% during July to September 2015.
Shopping also around remains worryingly low, with around 60% of annuities being purchased in-house rather than on the open market.
Tom McPhail, head of retirement policy at Hargreaves Lansdown, commented: “Two years on from the launch of pension freedom, we can now see what the new retirement income market looks like. Broadly, cash withdrawals are twice as popular as drawdown and drawdown is twice as popular as annuities. Investors do appear to be taking advice when they feel they need it but we remain concerned about the apparent low levels of shopping around on the open market. The take-up of Guaranteed Annuity Rates is finally showing progressive improvement, which is to the credit of both the FCA and the insurance companies.”
Steven Cameron, Pensions Director at Aegon UK, added: "Looking at the statistics from a glass half full perspective, it's encouraging that almost two thirds of those using flexible access drawdown are seeking advice. Our recent research shows just how risky it can be to enter drawdown without advice, particularly when determining a sustainable income which will last a lifetime based on personal circumstances. However, the fact remains that a third of retirees are leaving themselves exposed to the risk of running out of money.
"More worryingly, it is much less common for those using the UPFLS route to seek advice. The considerations, when accessing a pension through UPLS, are identical to flexible access drawdown and more needs to be done to highlight the value advice can add."
