New rules introduced in April have led to older people withdrawing £4.7 billion from their pensions, according to new figures.

In the first 6 months of the new freedoms, £2.5 billion was released in cash lump sum payments, according to the Association of British Insurers (ABI). There were 166,700 payments, averaging just under £15,000 each.

The remaining £2.2 billion was released as drawdown payments, average £3,600 per payment.

The freedoms were introduced on April 6 and mean people aged 55 and over no longer have to buy an annuity with their retirement pot.

Small pensions cashed in

Small pension pots have, in general, been totally cashed in under the new freedoms while larger ones are being used to drawdown regular sums.

Using drawdown payments allows savers to have their cake and eat it – they still have the regular income from the pension but can dip in and take out lump sums when needed.

Around 3 in 5 people are changing pension provider when buying a new drawdown policy.

Not the end of annuities

While annuities can provide retirees with a secure, regular income, many have felt they have underperformed in recent years.

But, despite the new freedoms, the number of retirement annuities bought has actually started to rise for the first time in three years.

In the third quarter of 2015, £1.17 billion-worth of annuity sales took place – up from £990 million during the previous quarter. This is the first quarterly increase since 2012.

ABI's director for long terms savings policy, Yvonne Braun, says more people are realising that having a regular income in retirement makes sense, which explains the rise in annuity sales this quarter.

She also suggests that the number of people cashing in their pension pots is starting to level off as larger pots are used to buy retirement income products.