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Pension savers urged to avoid major pitfalls as retirement plans could 'backfire' . Savers withdrew funds at unprecedented levels during the 2024/25 financial year, with total withdrawals jumping 36 per cent compared to the previous period.

Philip Lewis, Head of Financial Planning Advice at Evelyn Partners, says: "Gradual annual increases in the overall amounts taken from pensions are to be expected as the population ages and more defined contribution pension holders reach retirement, but other factors are definitely at play with the recent growth in withdrawals."

Mr Lewis warned UK households over withdrawing the 25 per cent tax-free pension commencement lump sum without careful planning.

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