Savers have accessed a total of £9.2bn through pension freedoms since the reforms were announced, with around £1.6bn taken from pension pots in the last three months.
Figures published by HM Revenue & Customs show a total of 516,000 payments were made from pension pots between April 2015 and March 2016, and over one million payments were made between April 2016 and the end of last year.
The number of individuals accessing their pension on a quarterly basis has almost doubled from 84,000 in the three months to June 2015 to 162,000 as at the end of 2016.
The data from HMRC covers “flexible payments” from pensions, which include full or partial withdrawals, flexible drawdown and buying a flexible annuity.
The Treasury says guidance service Pension Wise has had over 3.7 million visits to the website and carried out over 100,000 appointments since pension freedoms was introduced in April 2015.
Treasury economic secretary Simon Kirby says: “Giving people freedom over what they do with their hard-earned savings, whether it’s buying an annuity or taking a cash lump sum, is the right thing to do.
“We are working with our partners, including Pension Wise, the regulators and pension firms, so that savers have the support they need to understand the options available to them.”
Just group communications director Steve Lowe says: “We are now nearly two years into the new rules and, despite the official figures, we remain in the dark about how many of those taking pension cash lump sums are thinking about their long-term financial security and how many are grabbing it to spend while they can.
“We need a lot more detail if we are going to identify and head off any future problems.”
AJ Bell pension expert Gareth James says: “Whilst it is good to see the pension freedoms are being utilised by a large number of people, it is dangerous to use the £9.2bn as a measure of success when it doesn’t tell us what people are doing with that money.
“Are they using it to provide a regular and sustainable income as pensions are designed to do, or are they spending it too quickly and likely to run out of money too quickly?”
He adds: “It is important the Government carries out a more detailed analysis of how the pension freedoms are being used before any realistic assessment of their success can be made.”