The number of individual pension freedom payments hit a record 628,000 in the final quarter of last year, according to data from HM Revenue and Customs.
The payments have steadily increased from 121,000 in the second quarter of 2015, which is when the figures date back to.
But average pension freedoms withdrawals per person dropped to a record low of £7,197 in Q4 2018, down from £7,597 in the previous quarter.
In total 264,000 people withdrew £1.9bn from their pensions during the final quarter of 2018.
Up to £23.6bn has now been flexibly withdrawn from retirement pots since the reforms launched in April 2015
The data from HMRC covers “flexible payments” from pensions, which include full or partial withdrawals, flexible drawdown and buying a flexible annuity.
AJ Bell senior analyst Tom Selby says: “While the popularity of the pension freedoms shows no signs of abating, the amount people are withdrawing from their funds per quarter has dipped to the lowest level on record.
“Although it is too early to draw firm conclusions about why this has happened, it could be a sign of people showing restraint in how they spend their hard-earned retirement pots.”
He adds: “Millions of savers in drawdown have faced torrid markets during 2018, with the FTSE 100 down 12 per cent and most funds delivering negative investment returns. In these circumstances it can be sensible to cut back withdrawals in order to ensure you don’t run out of money during retirement.
“The past 12 months will have been particularly difficult for anyone who entered drawdown for the first time – especially if they took large income withdrawals just as markets hit the skids.”