New data has shown that pension holders withdrew more than £2.3 billion during the second quarter of 2018 under the pension freedom rules.
According to HM Revenue & Customs (HMRC), this was an increase of 35 per cent compared to the previous three months, when just £1.7 billion was withdrawn.
In total 574,000 payments were made to 264,000 savers between April and June this year, which means that since the pension freedoms rules were introduced in April 2015 £19.8 billion has been withdrawn.
During the same period last year, only 403,000 payments were made to 200,000 people totalling £1.9 billion, showing an increase in people drawing down their pensions using the tax efficient system.
The data on withdrawals also cover flexible payments from pensions, which include full or partial withdrawals, flexible drawdown or buying a flexible annuity.
The data shows that some people are making multiple withdrawals in a tax year, while the age that most are accessing their pensions suggests that many are withdrawing funds prior to the state pension age.
Some pension experts have even gone as far as to suggest that some savers are using the new system like a bank account in order to supplement their lifestyle before retirement.