The official numbers show £6.54bn was withdrawn in cash from pensions last year. That is substantially up from the £5.69bn withdrawn in 2016, but the fourth quarter saw the least money withdrawn (at £1.50bn).

While the rate of growth has slowed, the number of payments continues to increase as more and more people choose drawdown to provide their income in retirement.

Withdrawals seem to have settled down at between £1.5bn and £1.6bn per quarter. Steve Webb, director of policy at Royal London, said this increasingly represented the ‘new normal’. He added: “These 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 £1.5bn 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.”

Nathan Long, senior pension analyst at Hargreaves Lansdown, said the figures show that retirees are generally using the freedoms responsibly: “Rather than use pensions to splurge on an extravagant Christmas, retirees have operated restraint when managing their pensions showing the new rules are bedding in nicely and the amount being withdrawn is stabilising.

“The number of payments made has increased, but this could simply be a reflection of more and more people using drawdown for their income in retirement. Some drawing down to provide a monthly income will have three payments in each quarter, so we should expect these number of payments to continue to grow as more and more people choose this strategy. The fact the rate of growth is slowing actually shows that the dash for cash is abating and retirees are facing up to managing their pension pot to provide for their life after work.”

Andrew Tully, pensions technical director, Retirement Advantage, highlighted a trend of pension pots being withdrawn fully: “There is insufficient information to tell us why. It could be that people are reacting to uncertainties in the economic environment, or are simply worried about the legislative goalposts changing again, or they might just want their money.

“We know people are accessing their pensions for the first time at younger ages, certainly before they are due to retire. And from our research we know they are spending the cash on making home improvements, going on holidays, paying off debts and also saving the money outside of the pension.”