More than £1bn has been transferred out of pension funds since April, George Osborne has revealed.
The Chancellor said 60,000 people have made use of the pension freedoms since they came into effect two months ago.
Speaking in the House of Commons, Mr Osborne said: “These unprecedented pension freedoms have been widely welcomed.
“It is a sign that this is a real success, but we have to make sure that people get the best advice, that the market responds and that companies up their game in helping customers make use of these freedoms.
“We will be watching these things very carefully.”
These figures suggest people may be encashing relatively small pots, with the average pot around £16,600 in size.
Last week the ABI responded to concerns that pension providers were making it hard for people to access their cash.
Yvonne Braun, director of long term savings policy, ABI said insurers are committed to making the pension reforms a success.
Secretary of State for Work and Pensions Iain Duncan Smith has said warned providers not to drag their feet, and said new pensions minister Baroness Altmann would be meeting some of them in the coming weeks.
Adrian Walker, Old Mutual Wealth’s retirement planning manager, said: “The Chancellor has suggested that more than £1bn withdrawn from pension funds since the April reforms constitutes a success. The UK has a problem with saving, not spending, so care needs to be taken when deciding how to measure the success of the pension freedoms.
“I would suggest that a more appropriate measure of success will not come for many years, when those people who have withdrawn money from their pensions are still enjoying the retirement for which they have planned and saved for many years. ”
