The Association of British Insurers (ABI) said “further reforms and safeguards” are needed to ensure the long-term sustainability of the pension freedom rules.

Pension freedoms came into force in April 2015 and marked some of the most radical changes to pensions the UK has seen. They meant people over 55 could have full access to their pension savings and were no longer tied to purchasing an annuity.

The ABI said rates at which people are withdrawing cash from their pension could see people running out of money in retirement if they do not have other sources of income.

Since the freedoms were introduced, 40% of savers have withdrawn money at a rate of 8% or more a year, far higher than the recommended 3.5%.

So far over £30bn has been withdrawn from pension pots, with latest figures showing that, in 2018/19 alone, over 350,000 pension pots were fully withdrawn.

The changes placed greater responsibility on savers to ensure they make the right choices for their retirement.

Further reforms and safeguards are needed, as too many people are making complex and vital retirement decisions without help, the ABI said.

According to data from the Financial Conduct Authority, in 2018/19 nearly half – 48% – of people who accessed their pension pots did so without regulated advice or guidance.

The ABI is calling for action to help future proof pension freedoms including later life reviews and mandatory risk warnings for people considering transferring from valuable defined benefit schemes.

Huw Evans, ABI director general, said: “The jury is still out on the success of the pension freedoms. We will only be able to judge their true impact decades from now, once it is clear whether those who have exercised their choices have the retirement they were hoping for.”