The updated figures, released on 27 April, show that £1.7bn was withdrawn in the first three months of the year, representing a 10% increase on the total accumulated figure.
Further, the results show that, in the first quarter of the year, 500,000 flexible payments were made to 222,000 people with an average withdrawal amount of £7,644.
ABI concern
The results come a day after the publication of a Association of British Insurers (ABI) report aimed at engaging consumers with their retirement options.
The report was fuelled by revelations that more than half of fully withdrawn pension pots have not been spent, but moved into other savings and investments instead.
The ABI said this is concerning as it could mean consumers are paying too much tax, while missing out on compound investment growth.
Earlier this month, Prudential released research that showed two out of three people over the age of 55 are still confused by pension freedoms regulations.
Rob Yullie, head of retirement at ABI, said that the pensions freedoms give more power to consumers but the flexibility also increases the complexity and risk consumers face.
“Our recommendations are for interventions that will transform the way people interact with their pension pots and help people navigate their choices,” he said.
‘Reckless conservatism’
Tom Selby, senior analyst at AJ Bell, said while there are signs some people may be taking too much too soon from their retirement pots, there is no clear evidence this is a widespread problem.
“Indeed, many remain concerned that ‘reckless conservatism’ – where people take too little from their funds and struggle to make ends meet – could prove to be just as significant a problem.
“All eyes now turn to the FCA Retirement Outcomes Review, which is set to deliver its verdict on the drawdown market and any remedies it deems necessary to protect consumers. This is likely to pay particular attention to the sustainability of withdrawals and the extent to which people entering drawdown are engaging with their pension,” Selby said.
The FCA report is scheduled for publication in Q2 2018.
AJ Bell’s own research, Selby said, shows that many savers lack knowledge about the decisions they are taking at retirement.
“This must now become the central focus for both policymakers and the wider retirement income sector,” he said.
