The most popular course of action for people accessing their pensions for the first time was taking it out as a full cash lump sum, the latest FCA data showed.
In the first quarter of 2024, 51 per cent of pension pots accessed for the first time were through encashments.
In the first three months of the year 231,976 people of the total 450,851 accessing their pots took this route.
And 70 per cent of this group did so without taking advice.
However, when it came to the assets under administration value of the pots accessed for the first time, drawdown came out on top at £19.1bn.
This represents 145,113 pots and 45 per cent of those entering drawdown in the period did so after getting advice and almost 10 per cent consulted Pension Wise.
While the value of encashments in the first quarter of 2024 was around £2.8bn.
In the first three months of 2024, 68 per cent of those who took out both encashments and drawdown products were aged between 55 and 68.
Meanwhile, 44,645 of the pots accessed in the three months were through annuities, with 46 per cent of this group doing so without advice.
AJ Bell’s director of public policy, Tom Selby, said the rising prices and interest rates has forced people to access their pensions to make ends meet.
He added: “Anyone accessing their retirement pot for the first time needs to think carefully about the long-term sustainability of their withdrawals and the tax implications of accessing their pension.
“Taking too much, too soon from your hard-earned pension runs the risk of exhausting your fund early, while you may also end up paying unnecessary income tax if your withdrawal pushes you into a higher income tax band.
Overall, the figures showed the number of pension plans accessed for the first time i 2023-24 rose by 19.7 per cent in 2023-24 compared with the previous year.
tara.o'connor@ft.com
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