George Osborne's relaxation of pension withdrawal rules has proven popular with the British public, with hundreds of thousands of people taking their cash out of their retirement funds since the chancellor's measures came into force. More than 200,000 have dipped into or emptied their pension pots since April, according to the Financial Conduct Authority (FCA).
The City watchdog data is the first to be published since the chancellor enabled over 55s to withdraw money from their pension without taking out an annuity. However, the savers are still taxed on 75% of any lump sum they take out (the first 25% is tax-free).
Tom McPhail, of financial firm Hargreaves Lansdown, told IBTimes UK that the withdrawal rate exceeded expectations, but the number of people taking advantage of the new rules may slow in the future.
"It is now abundantly clear that people are embracing the freedoms to a much greater extent than was hitherto believed. Now, all of a sudden, we are seeing that 200,000 people have used these freedoms in the first quarter – that's roughly double the number of people who were accessing their pensions pots this time last year and the year before, and the year before that," the head of pensions research said.
"Clearly some of this will be an initial surge of activity as people anticipated the freedoms and waited to use them, maybe it will die down again," he added.
The FCA figures also revealed that annuity sales had plummeted to 12,418 between April and June when compared to 89,896 over the same period in 2013.