Around 400,000 payments were made each quarter during the year, compared with around 125,000 a quarter in 2015, the first year of the pension freedoms, and around 350,000 a quarter throughout 2016.

In total, £15.75bn has been taken out of pension pots since April 2015. The amount taken out last year was 15% higher than the £5.7bn withdrawn in 2016.

Tim Holmes, managing director at financial adviser Salisbury House Wealth, said: ‘High levels of withdrawals are largely driven by the fact that annuity rates are just so low. Many people hoping to live on their pension savings are having to hunt for higher yielding assets outside annuities.’

Holmes said there had not been the ‘tsunami’ of withdrawals which had raised concerns initially, but warned: ‘However, care must be taken to ensure that people do not take out too much which could affect their income in later life. Accessing funds without advice can be dangerous due to the constant rule changes imposed by successive governments.’

Flexible payments form pensions statistics are here. 

Report by Pat Sweet