A total of £12.7bn has been withdrawn from pensions since Freedom and Choice was introduced in April 2015, according to latest HM Revenue & Customs (HMRC) statistics.
At the end of 2016, the total figure reached £9.2bn, and has since increased by £3.5bn in the two quarters of 2017, with an all-time high of £1.9bn withdrawn in Q2, compared to £1.6bn in Q1.
Despite the total increase, average withdrawals per individual have continued to fall - a trend seen since the introduction of the freedoms. The average size of withdrawals per person decreased to £9,300 in the second quarter of 2017, from £11,132 in the same quarter of 2016.
Commenting on the figures, Royal London director of policy Steve Webb said:
"These figures show that more and more people every quarter are taking advantage of the new pension freedoms.
"Any future government would find it politically impossible to reverse this policy which is now a significant part of the retirement planning of large numbers of people.
"The priority for regulators must be to ensure that people are given the right guidance and advice to make best use of these freedoms."
The average number of payments per person was up from 1.86 in Q2 2016 to 1.92 in Q2 2017, which suggests more people are setting up regular withdrawals rather than taking ad-hoc lump sums.
AJ Bell senior analyst Tom Selby said:
"The pension freedoms continue to be hugely popular, with evidence suggesting most people are accessing their retirement pot in a sensible way rather than ravaging their savings to splurge on fast cars.
"While the evidence so far is encouraging, the FCA will need to keep a close eye on the market to ensure consumers continue to manage their withdrawals in a sensible, sustainable manner."
There are various reasons as to why Q2 2017 was a record period for withdrawals, said David Robbins, senior consultant at Willis Towers Watson. "More people making withdrawals does not mean that increasing numbers of over-55s are rushing to empty their pension pots. If you had a steady stream of people accessing their pot for the first time, a growing pool of pensioners making gradual withdrawals would push up the total over time.
"It's possible that the number has been swelled further by the recent surge in transfers from defined benefit schemes. If so, it looks as though huge transfer values are not typically being cashed out in a hurry: the average payment per individual is lower than it was this time last year.
He added that the headline £1.9bn in Q2 2017 is not the total amount withdrawn from pension pots.
"It excludes the tax-free 25% and you can't simply add this on because some people will take their tax-free cash first and taxable payments later. It will also include payments to some people who were in drawdown before pension freedom and who may not be taking out any more than they already were."
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