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Around 80% of Brits take a lump-sum pension payment when they retire

By Tom Farley, Wed 15 Jun 2011 - Published in Pensions

There are nearly eight out of ten Brits taking a tax-free, lump-sum payment from their private pension fund when it is time to retire.

According to research from Prudential, the average amount that Brits get from this is £21,500, which is 11 per cent down from 2008 figures that saw pensioners draw £24,154 from their company scheme.

Furthermore, its report found that 19 per cent of Brits were using their pension to pay off debts, including their mortgage.

Vince Smith-Hughes from the Prudential, said: "The effects of the recession have made the majority of people in Britain more financially aware and cautious with their money.

"It's understandable that people are keen to enjoy the money they've worked so hard to earn when they retire."

Recently, Informed Choice revealed that women are more clued-up about saving for a pension than men.

Martin Bamford, chartered financial planner at the firm, added that there has been an improvement in education when it comes to people planning for their retirement.