The average value of pensions freedoms withdrawals per person fell to a record low of £7,197 in Q4 2018, down from £7,597 in the previous quarter, according to new figures from HMRC.
The total value of payments also fell, by £60m from the previous quarter, to £1.9bn, while the number of individual withdrawals reached a record-equalling 264,000, up from 258,000.
Commenting on the findings, AJ Bell senior analyst, Tom Selby said: “While the popularity of the pension freedoms shows no signs of abating, the amount people are withdrawing from their funds per quarter has dipped to the lowest level on record.
“Although it is too early to draw firm conclusions about why this has happened, it could be a sign of people showing restraint in how they spend their hard-earned retirement pots.”
In 2018, £7.8bn was withdrawn from 2.3 million payments, a significant increase on the £1.3bn in withdrawals from 614,000 payments in 2017.
Just Group group communications director, Stephen Lowe added: "These are record numbers but that's only to be expected as more people reach the age they can take a flexible payment and awareness of flexible options increases.
“Our big problem is that we don't have any 'what does good look like' benchmarks to compare these figures to, plus they are only a partial snapshot.”
A total of £23.6bn has now been flexibly withdrawn from pension pots since the launch of pensions freedoms in April 2015.
John Glen, Economic Secretary to the Treasury, John Glen commented: “Pensioners should be able to control what they do with their own hard-earned pension savings, and that’s exactly what the pension freedoms reforms did.
“Over £23bn of pension savings have been accessed by over a million savers since we introduced the reforms, and with free impartial advice available to everyone, pensioners across the country are now able to get the most out of their pension pot.”
Moneyhub CEO, Samantha Seaton concluded: “Pension freedoms have allowed people to engage more actively with their pensions and many are already aggregating their pots.
“But taking advantage of the freedoms is not the right choice for everyone and there are rightly concerns around how to ensure that people have access to the right knowledge to help them make the right choice for them.”
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