Taxable pension withdrawals top £75bn for under 65s revealing scale of early pension access

New analysis from Lumera highlights that 2.4 million people first took a taxable pension payment before reaching age 65.

London, 13 August 2026 – Analysis of HMRC data¹ by Lumera, a leading insurtech company, reveals that since the inception of ‘pension freedoms’ in 2015, 2.4 million people first took a taxable flexible pension payment when they were under the age of 65.
This group of ’early accessors’ account for seven in 10 (70%) of the 3.42 million pension savers who have taken taxable payments from their pension pots.
A total of £124.7 billion has been taken from pensions as taxable flexible payments since 2015 and over 60p in every pound (61%), totalling £75.5bn, was received by individuals who were under 65 when they took a taxable payment, as savers take advantage of flexibilities in the pension system to drawdown on their later-life savings.
Crucially, these payments do not include the tax-free lump sum, highlighting the scale of early pension access, and prompting questions about the sustainability of drawdown levels and long-term implications for retirement income security.
The number of under 65s taking a taxable pension payment rose by 7% from 602,000 in 2024/25 to 644,000 in 2025/6, with the total value of taxable payments to that group increasing by £1.1bn over the same time period – from £10.3bn in 2024/25 to £11.4bn in 2025/26.
The total taxable pension payments since the inception of pension freedoms are shown below:

* The individuals count is grouped by age when first accessing a taxable pension payment

Taxable pension withdrawals can have significant consequences for people accessing their pension savings while they are still working. While savers can usually take up to 25% of their pension tax-free, further withdrawals are added to their other taxable income and could push them into a higher tax band. 
Flexibly accessing taxable pension income can also trigger the Money Purchase Annual Allowance, reducing the amount that can subsequently be paid into defined contribution pensions with tax relief from £60,000 to £10,000 a year - a potentially significant constraint for those continuing to work and save for retirement.
Peter Roos, Chief Commercial Officer at Lumera, commented: “Pension freedoms have given millions of people much greater flexibility over how and when they use their retirement savings but accessing a pension early can have important and sometimes overlooked consequences.
“The concern is not necessarily that people are accessing their pensions before 65 - for many, doing so will be entirely appropriate - but whether they fully understand the tax implications and the potential impact on their longer-term retirement income. Taking money out earlier also means losing the potential investment growth on those savings and leaving a smaller pot to support what could be several decades in retirement.
“As more people reach retirement with defined contribution savings, initiatives such as Guided Retirement and Targeted Support could play an important role in supporting savers to achieve better outcomes. Both of these initiatives will require providers to be able to leverage data at scale, whether it is to assign members to default pathways, or to provide more targeted guidance at the point they access their pension. This can also help savers avoid unintended tax consequences and make choices that are better aligned with their long-term retirement needs.”
The data also reveals a marked gender divide in flexible pension withdrawals. Since 2015, male savers have withdrawn £94.19bn, triple that of female savers (£30.28bn). Male savers also accounted for 64% of the total 3.42 million individuals taking payments, but 76% of the total value withdrawn.
“The significant gender divide in withdrawals is also notable, with men accounting for a much greater share of both savers accessing their pensions and the total value withdrawn,” added Peter Roos. “This is likely to reflect, at least in part, wider differences in pension wealth and retirement savings between men and women, and underlines the importance of ensuring support works for people with very different financial circumstances.”
ENDS
1 – HMRC, Private Pensions statistics, July 2026
https://www.gov.uk/government/statistics/personal-and-stakeholder-pensions-statistics
For more information, please contact:
Peter Roos, CCO, Lumera: +44 7552 861 411, peter.roos@lumera.com
Christine Blinke, CMO, Lumera: +46 73 901 02 01, christine.blinke@lumera.com
Temple Bar Advisory: Sam Livingstone (07769655437) and Juliette Packard (07425826161) 
lumera@templebaradvisory.com
About Lumera
Lumera is an insurtech company driving digital transformation across the global Life and Pensions industry. We provide technology solutions for pensions administration, data management and migration to a broad base of prominent clients. Combining our technology and industry expertise, we offer a wide range of expert services, tailored to local markets and supported by prudent AI to enhance automation and data quality. 
Our mission – the Prudent Revolution – is about combining technology with partnerships to offer Life and Pensions companies the fastest and safest journey through complex change.
Lumera is headquartered in Stockholm, with additional offices in the UK, the Netherlands, Norway, Sweden and Vietnam.
The principal owner of Lumera is Monterro, a leading software investor in the Nordics.
For more information, visit: www.lumera.com
Follow Lumera on LinkedIn.

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