Over-50s have raided their pension pots to cover the cost of soaring energy bills and more expensive supermarket shops. 

The Office for Budget Responsibility has dramatically revised its forecasts for tax receipts generated from people drawing money from their pensions to £1.7bn for the year, up from £400m – a two fifths increase. 

The official forecaster said it revised its projections, which are an indicator of the proportion of people draining their pension savings, after withdrawals rose by a fifth last spring. 

Savers are able to begin drawing on their pension pots from 55 even if their official retirement date is years away.  

The official forecaster warned savers would be accessing their savings early as households face the greatest drop in disposable incomes this year due to the biggest cost of living crisis for a generation. 

In documents released alongside the Chancellor’s Spring Statement on Wednesday it said: “We assume that people will make use of earlier withdrawals to manage the rise in the cost of living this year, and that the steady state level of withdrawals will be higher than we had previously assumed.”

It added that other over-50s had been forced to take retirement early, having been forced out of the jobs market during the pandemic.

It said the higher number of people making withdrawals was “likely to be linked to a pandemic-driven increase in the number of over-50s bringing forward their retirement plans and facilitating that with earlier access to their pension pots”. 

Households face a cocktail of higher bills this year. Workers face higher tax on their incomes from April. The Chancellor is upping the point at which someone pays National Insurance by £3,000 to £12,570 in July and has promised to cut the basic rate of income tax by 1p in the pound by 2024, but workers will still suffer in two weeks.