More than £28bn has been withdrawn since the pension freedoms started in April 2015 according to the latest statistics issued by HM Revenue and Customs.
The data from HMRC covers “flexible payments” from pensions, which include full or partial withdrawals, flexible drawdown and buying a flexible annuity.
In this quarter, Q2 2019, £2.75bn was withdrawn from pensions flexibly, a 21 per cent increase from £2.27bn in Q2 2018.
A record 336,000 individuals withdrew from pensions this quarter, a 27 per cent increase from 264,000 in the same quarter last year.
In the release HMRC points out total withdrawals in Q2 are typically larger than in other quarters, as some taxpayers plan their withdrawals around the start of the new tax year.
Previously this has been driven by larger value withdrawals in Q2, but this year this is driven by increased numbers of individuals withdrawing.
The average amount withdrawn per individual in Q2 2019 was £8,200, down from £8,600 in Q2 2018.
Reacting to the figures, Aegon pensions director Steven Cameron says: “Over the last four years the retirement behaviour of over 55s has been significantly influenced by pension freedoms and today’s figures show more people are choosing to access their pension, but increasingly withdrawing a smaller amount when they do.
“With people no longer choosing to retire at a single point in time the freedoms give them the flexibility to transition into retirement by accessing some retirement savings to help support a reduced working pattern.
“Older workers want to be able to plan their retirement on their own terms and the introduction of pensions freedoms enables that by allowing them to reduce their working hours while enjoying more leisure time.”