Since pension freedoms were launched in April 2015 the amount withdrawn has hit £7.65bn.

However, the latest figures show the average amount being withdrawn is getting smaller, falling to less than £10,000 per person, down from £19,000 in the first quarter the freedoms were launched.

Fewer people also accessed their pension pots, with 158,000 doing so during the third quarter, down from 159,000 in the second quarter. However, the number of payouts did increase from 296,000 in the second quarter, to 324,000 in the third quarter.

AJ Bell senior analyst Tom Selby says these latest figures show people are embracing the pension freedom and that flexible withdrawals have now become the default for income during retirement.

“It is interesting that the average withdrawal per person has gradually reduced since the launch of the freedoms,” he says.

“This suggests the initial dash for cash has tailed off and people are becoming more realistic about a sensible withdrawal level over time.”

However, Selby adds that an average withdrawal rate of £10,000 per person during one quarter does seem high, in relation to the average pension fund is of about £40,000 in the UK.

“This shows the limitations of this data,” he says. “To get a full picture of how successful the pension freedoms are it would be good to see what these withdrawals are being used for and to have some sense of how much people have remaining invested in pensions.”