More people are cashing in their full pension in a "worrying signal" that Britons are not prepared for retirement, new data has shown.
The number of savers withdrawing their pension in full has jumped by 29% since 2018 - that's 105,038 pots, data published annually by the Financial Conduct Authority revealed.
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In 2024-25, 462,160 people completed a full withdrawal.
Doing this can trigger unexpectedly large tax bills. This is because the withdrawal can be treated as income, meaning savers are pushed into a higher tax bracket in a single year.
This means a significant portion of their retirement pot may end up going straight to the taxman.
Georgie Edwards, associate director at pension specialists TPT Retirement Solutions, said: "The rise in people cashing in their pensions in full is a worrying signal about retirement adequacy in the UK.
"For many, it's not a strategic choice but a sign their savings aren't sufficient - and some may also be reluctant to consolidate pots, missing the chance to build a more sustainable income."
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By pot size, more than 300,000 pension pots withdrawn in full in 2024-25 were worth less than £10,000, and a further 112,526 were worth between £10,000 and £29,000.
(c) Sky News 2026: More people cashing in full pension in 'worrying signal' for UK's retirement plans
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