New pension rules came into force in April
A pension provider has apologised to customers after backtracking on plans to allow people to withdraw some of their pension savings in cash.
Friends Life is writing to 1,300 pension savers who asked to take out some of their savings in cash to tell them this option will not be offered.
Initially it said it intended to allow this to happen, under new rules introduced by the government in April.
Other pension firms have been providing the service.
A spokeswoman for Friends Life said: "We apologise to those Friends Life customers who wish to partially withdraw their savings through the new pension freedoms, as we are not offering this service at the moment.
"We are planning to offer partial withdrawals in due course."
The company, part of Aviva, said that savers could instead take the whole of their pension pot, a move that could land people with a large tax bill. Savers could also transfer their pension to another provider, which could incur exit charges.
Older Aviva customers are able to withdraw cash in chunks from their pension, as are customers of many other providers. Some savers are obliged to take advice to do so, which comes for a fee.
The new pension rules do not force companies to offer partial cash withdrawals. The Treasury said that savers could switch provider if they found this service was blocked.
"We have made sure that people can transfer their pension if their provider does not offer them the option they want and our free and impartial guidance service, Pension Wise, external, can help them understand all their options," a spokesman said.
