Smaller pension pots may mean pensioners in Huddersfield miss out on the Chancellor's new tax giveaway.

People who are approaching retirement in Yorkshire and the Humber are, alongside London, the least likely to have a big pension pot, with only 18% with pots over £500,000.

George Osborne has announced plans to abolish a 55% tax on funds in drawdown pension schemes that are left over when people die.

Figures on individual wealth show 6.4m people in Britain have pension pots worth £500,000 or more but 13.5m do not have any pension savings at all, and will only have the state pension, around £8,000 a year, to fall back on.

A pension pot of £500,000 a year will net you a drawdown income of around £32,625 for a man aged 65, if you choose to take 25% of the pot tax-free first.

Most people who have a pension, 38% of those with savings, have between £100,000 and £499,999. A pension pot of £100,000 will get a man aged 65 a drawdown income of up to £6,525, after a 25% tax free sum and £250,000 will provide a him with an income of £16,313.

More than 400,000 people have drawdown pensions. While buying an annuity gives you a set annual income for life, based on the size of the pension pot, putting your money into a drawdown fund leaves it invested in the stock market. People can then draw an income from the pot each year.

It is more flexible than annuity because it means pensioners do not have to take money out, or can vary the amount they withdraw each year.

However, the money is still subject to the vagaries of the stock market, meaning the total fund can fall as well as rise. Poor stock market performance or poor planning may mean the money starts to dwindle more quickly than expected.

It is debateable how many people actually paid the 55% tax, particularly if people are tending leaving the money to a spouse to continue to use as a pension.

At present the unused pension pot can be passed on to a dependant, such as a spouse or child under the age of 23, and used as a pension, through an annuity or continued drawdown, without paying the tax.

The 55% tax is payable if the remaining money as a lump sum, which is the only option if the money is left to a non-dependant.

The money can also be passed on tax free if the person dies before the age of 75 without using their savings.

But the money is there to be used and figures on wealth suggests people do as pension savings shrink after age 65. Among those aged 45 to 64, only 15% have no savings and 8% have savings of less than £20,000. But among pensioners, 20% have no savings and 12% have savings under £20,000 suggesting pots are being used up.

Among over 65s, just 8% have a pension pot of £500,000 or more.