"Roughly 200,000 people are using the freedoms each quarter and are withdrawing a steady £1.5 billion per quarter. "
A total of £15.7 billion has now been withdrawn since the policy was introduced in April 2015.
In Q4 2017, around 200,000 individuals withdrew money flexibly from their pension pot and a total of around £1.5 billion was withdrawn.
Withdrawals have settled down to a steady level over the past 18 months, with the quarterly rate of withdrawal remaining between £1.5 billion and £1.6 billion in five of the last six quarters.
Steve Webb, Director of Policy at Royal London, said: "These new figures show that withdrawals under pension freedoms are now settling down to a steady level. Roughly 200,000 people are using the freedoms each quarter and are withdrawing a steady £1.5 billion per quarter.
"This is very much the new normal and suggests that a significant number of those at or in retirement continue to value the flexibility given by the new legislation. However, it remains important that individuals take expert advice to make sure that the withdrawals from their pension fund are sustainable in the long-term’.
Stephen Lowe, group communications director at Just Group, commented: “With pension freedoms well-established, it seems that taking cash from a pension pot is becoming the new norm for millions of people. Savers are enjoying the flexibility of being able to exercise greater choice about how to use their pension savings. More than £6.5 billion was withdrawn last year, up 15% from 2016, and there’s a school of thought which says that much money can’t be wrong. But the truth is we don’t know – the industry still has little idea whether these savings are being used sustainably.
“That’s why the issue of making sure people deciding how to use hard-earned savings get guidance is so important. The Financial Guidance and Claims Bill will reach its Committee Stage next week and, as it stands, the Bill is set to help many thousands of people facing the complex decision of what to do with their pension pots.
“The proposals set out do not mandate that people must take guidance. People who have taken regulated financial advice may of course choose to opt-out. But for many millions of people, automatically enrolling them into free impartial guidance is a positive step and should lead to them achieving a safer and better outcome.
“This Bill seeks to help these people make good, life-changing decisions with their savings so that more pensioners can look forward to a financially-secure retirement. As the Conservative MP, Paul Masterton, puts it: ‘If we are looking for something as close as possible to a silver bullet, default guidance is probably it.’”
