More than half (54 per cent) of all pension schemes that were accessed in 2018/19 were completely emptied of all savings, the Financial Conduct Authority (FCA) has revealed.

In its Retirement income market data 2018/19 report, the FCA found that, of the 645,000 pension pots that were accessed, 350,000 were fully withdrawn at the first time of access.

Around 90 per cent of the withdrawals were from pots with less than £30,000 in, with the average size being nearly £13,000.

Four in 10 pots accessed had a value of less than £10,000.

Just Group group communications director, Stephen Lowe, said that the data showing over half of accessed pots were emptied “raises concerns”.

He continued: "More than 350,000 pensions were fully withdrawn with an average size of nearly £13,000 so these are by no means insignificant pensions.

“Even where pension money is left invested and regular sums taken, the withdrawal rates are far higher than most experts would consider sustainable for a long-term investment such as a pension.”

Lowe also cited concerns about the number of drawdown customers withdrawing too much per year.

He continued: “The FCA figures show that four in 10 drawdown customers took more than 8 per cent of the fund value a year although for those with funds of less than £50,000 this rises to nearly two-thirds (63 pe cent). Overall 74 per cent of people are taking more than 4 per cent of the fund value each year.”

The Institute of Faculty of Actuaries has suggested a 3.5 per cent drawdown rate for 65-year-olds and 3 per cent for 65-year-olds.

However, AJ Bell senior analyst, Tom Selby, did not share Lowe’s concerns, saying: “While on the face of it the fact more than half of pots accessed are being fully withdrawn could be a cause for concern, the bulk of these are small pots and so there is less risk of people being hit with huge unnecessary tax bills.

“Equally, it is encouraging that as pension funds get larger and the tax impact of significant withdrawals becomes potentially greater, fewer people are taking 8 per cent or more from their fund.”

Nearly half (48 per cent) of the pension pots were accessed without advice, while 37 per cent were accessed by holders who took regulated advice and 15 per cent who received Pension Wise guidance.

FCA’s figures also pointed to a shift from annuities to drawdown, with 190,000 plans entering drawdown and only 74,000 annuities being purchased.

Commenting on the findings, AJ Bell senior analyst, Tom Selby, said: “These figures demonstrate the enduring popularity of the pension freedoms, with almost three people taking a regular income through drawdown for every one person buying an annuity. This represents a monumental shift in retirement behaviour the impact of which will be felt across the UK economy.

“However, far too few people are seeking advice or guidance about crucial retirement decisions across the board, and boosting these numbers needs to be a priority for the regulator.

“The nature of the pension freedoms means while some will use their newfound flexibility responsibly, others risk sleepwalking into disaster. Increasing take-up of advice and guidance is crucial to help mitigate this risk.”

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