More than half of over 55s do not know what their retirement options are, new research from Hargreaves Lansdown has found.
A survey of 1,500 people showed that overall, just 39% have a clear understanding of their retirement options.
The lack of clarity persists even for those approaching retirement age, with only 45% of over 55s understanding their options.
Hargreaves Lansdown warned that a lack of knowledge risks people making poor choices and highlights the importance of increased support.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Deciding when and how to retire, as well as how to draw an income, is hugely important and, in the event of annuity purchase, irrevocable. However, the data shows there are worrying gaps in our knowledge that risk the wrong decisions being made.
“For many, these decisions are many years away, and there’s time for them to do their research. However, digging a bit deeper shows that even for over 55s there’s a knowledge gap that needs to be addressed. At this age, many people may not have stopped work, but they can access their pension, and so the fact that only 45% of them said they clearly understood their options is concerning.”
Morrissey said those approaching retirement age need to consider whether they want a guaranteed income for life or whether they are willing to continue taking investment risk with their pension. For those opting for an annuity, people will need to consider what type suits them best.
Morrissey added: “It’s important to make use of all the support that is available out there whether that be financial advice or guidance services such as government backed Pension wise.
“The FCA’s work on the advice guidance boundary will also spell good news as it will enable providers to offer more support than they previously have been able to by letting them suggest more personalised options. Being able to offer such support could be a real gamechanger in helping people make more informed choices around retirement.”
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