Over £14bn has been withdrawn from pension pots since the launch of the pension freedoms in April 2015, data from HMRC has revealed.

The latest statistics, published 25 October, show the freedoms remain popular, as £1.59m has been taken from pension pots in Q3 of 2017. However, this is a slight drop from Q2, when £1.86m was withdrawn from pots.

Despite remaining popular, AJ Bell senior analyst Tom Selby has highlighted that the average value of withdrawals per person continues to fall, hitting a record low of £8,030 in Q3 2017.

“The fact people are on average taking less out per quarter doesn’t point to mass irresponsible spending, although we need a wider picture of people’s incomes and personal situations to draw firm conclusions,” he said.

“£14bn has been withdrawn from pensions since the freedoms launched in April 2015 and these latest figures set the scene for the forthcoming Work & Pensions Committee inquiry into the reforms. It is the manner of these withdrawals that is key, however, and specifically the sustainability of people’s retirement spending.”

In addition, Hargreaves Lansdown senior pension analyst Nathan Long believes that the popularity of the pension freedoms “may stave off any further tinkering to pension allowance and reliefs” in the upcoming Budget as it will be a boost to the Treasury.

However, Just Group communications director Stephen Lowe warned that the pension freedoms are “exposing thousands of people every month to significant risks that are not being mitigated successfully by the government’s Pension Wise service”.

“Tens of thousands of people are withdrawing large cash sums and in many cases all of their pension savings – but worryingly, they are making uninformed decisions which expose them to rogues and conmen, as well as unnecessary tax charges.

“We have called for a radical change in policy so that people are auto-enrolled into the government’s free, impartial guidance service, Pension Wise before they access their defined contribution pension benefits. This will provide them with help to make better informed decisions and to ensure their hard earned pension savings are used in the best way to provide a sustainable source of money in later life.”

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