More than £25bn has been withdrawn since the pension freedoms started in April 2015 according to the latest statistics issued by HM Revenue and Customs.
In total 284,000 people withdrew over £2bn from their pensions during the first quarter of 2019.
Average pension freedoms withdrawals per person were £7,254 in Q1 2019, a slight decrease from £7,644 a year ago but a significant decrease from £11,081 in Q1 2016.
A record 539,000 individuals received a payment in the last 12 months and taken out nearly £8.2bn over the same period.
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: “All the available evidence suggests that, in the main, savers continue to use the pension freedoms sensibly and are managing withdrawals with sustainability right at the front of their minds.
“The number of people using the pension freedoms continues to increase as expected but importantly the trend in the average amount per withdrawal has been consistently on a downward trajectory over the four years since the new rules were introduced.”
While the amount withdrawn from pensions has climbed steadily since 2015, the amount the government spends on pensions tax relief has stabilised over the same period.
New figures also published today by HMRC put the gross cost of pension tax relief at £38.4 bn in 2017/18, up around £1bn on 2016/17, but still slightly lower than the £38.6bn figure for 2015/16.
Commenting on the figure Royal London director of policy Steve Webb says: “The Treasury needs to make up its mind whether it wants more people to save in a pension or not.
“What is remarkable is how little the cost of pension tax relief has risen in recent years given the millions of extra workers who have been automatically enrolled into workplace pensions.
“Every time the Treasury attempts to cut the cost of tax relief they add new complications such as the tapered annual allowance and the money purchase annual allowance which make the system bewilderingly complicated.
“These new figures provide no justification for further fiddling and salami slicing with a system that should be stable over the long-term”.