Over £6bn invested in drawdown post-freedoms

The average fund totalled £67,500 and 53% chose to go with a different provider.

In comparison, £4.2 billion has been invested in 80,000 annuities, with an average fund of £52,500.

41.5% savers switched when buying an annuity, however around half of internal annuity sales had a guaranteed annuity rate attached.

For pay-outs, £4.3 billion has been paid in 300,000 lump sum payments, averaging £14,500, while £3.9 billion has been paid out via 1.03 million drawdown payments, with an average payment of £3,800.

The ABI concluded that the majority of savers are "taking a sensible approach", with 57% pots with 1% or less withdrawn during the last quarter.

However it raised concerns that a minority may be withdrawing too much too soon, at rates that could see their money run out in a decade or less if they are reliant on their pension pot as their main source of income.

In the last quarter, 4% of pots had 10% or more withdrawn and "many others are taking their whole pot in one go".

In the most recent quarter, annuity sales fell, with £950m invested compared to £1.1bn the previous quarter. Drawdown sales remained consistent, with £1.48bn invested, compared to £1.49bn the previous quarter.

Yvonne Braun, the ABI’s Director of Policy, Long Term Savings and Protection, said: “New data released shows that more than half of pots are having less than 1% withdrawn a quarter, which seems to indicate most people are taking a sensible approach. However, the data also suggests a minority are withdrawing too much too soon from their pension pot - 4% of pots are having a tenth or more withdrawn - and many other customers are taking their entire pot in one go.

“There may well be other factors at play here, such as people having other retirement income, for instance, final salary pensions or multiple pots. But this is a warning sign that requires further investigation. We need a full picture of these customers’ circumstances and income, which is something we urge regulators and the Government to work with all stakeholders to examine.

“The fall in annuity sales in the most recent quarter reflects ongoing pressure on rates, which will not have been helped by the recent decision to lower interest rates to a 300 year low, and further quantitative easing measures.”