£9.2bn cashed in since pension freedoms launch

More than 1.5 million payments have been made since the freedoms were introduced in April 2015 for people aged 55 and over, HM Revenue and Customs (HMRC) figures show.

Some 162,000 people have accessed £1.56bn in total flexibly from their pension pots over the past three months.

This is a slightly higher number than the previous quarter, when 158,000 people withdrew £1.54bn collectively.

The freedoms mean people are no longer required to use their pension pot to buy an annuity as a retirement income.

Instead, they have more choice over how they use their pot. Generally, the first 25% of the pot is tax-free and the remainder is subject to tax.

Annuities have been controversial in recent years due to falling rates, but they do act as a guarantee that someone will not out-live their savings.

Plans to allow existing annuity holders to cash them in were ditched in October, as the Government said consumers could not be guaranteed that they would get good value for money.

Pension Wise - the free, guidance service set up alongside the pension freedoms - has had more than 3.7 million vistis to its website and more than 100,000 appointments have been made, the Government said.