The withdrawal figure was a 35% increase compared to the first quarter of the year when £1.7bn was withdrawn.

The total amount of money withdrawn since Pension Freedoms were introduced, in April 2015, now stands at £19.8bn and more than four million flexible payments have been made to one million people.

The average withdrawal per person has hit £8,595, almost £1,000 higher than the previous quarter but £700 lower than the second quarter of 2017.

Tom Selby, senior analyst at AJ Bell, said: “The popularity of the Pension Freedoms shows no signs of abating, with almost £20bn now flexibly accessed since the reforms launched in April 2015.

“The money involved is truly staggering and the changes are likely to have given a short-term boost to the UK economy, with many over-55s choosing to spend more money today rather than leave it invested in their retirement fund.
 
“The good news is average withdrawals per person are not spiralling out of control.

“In fact, while the average withdrawal is almost £1,000 higher than in Q1 2018, it is down by about £700 on the same quarter in 2017.”
 
He added: “It’s hard to tell the extent to which such withdrawals are sustainable without a broader picture of individuals’ finances.

“Many will have seen the value of their drawdown pot boosted by the stockmarket bull run - the real test of the reforms will come when markets inevitably hit the skids.”

Steve Webb, director of policy at Royal London, said: “In the latest three months over a quarter of a million people took the opportunity to make flexible withdrawals from their pension, and withdrawals were at a record level.  

“The key challenge is to make sure that more people take advice and guidance when deciding how to access their pension savings so that they do so in a sustainable way that meets their objectives.”