More than 80 per cent of people in or approaching retirement are uncertain how to make the most of their income in retirement, figures from BlackRock have suggested.
A poll conducted among people aged between 55 and 74 revealed that 81 per cent did not know where to get the best income-generating investments.
Moreover, 28 per cent of the 2,000 people interviewed in the UK had not got a clue what to do when it came to the incoming pension freedoms, suggesting they were unprepared for the new flexibilities.
Tony Stenning, head of UK retail for the investment house, said: “Caution must prevail. We need to ensure this is workable and pensioners are adequately protected. There is no doubt that some in retirement feel that they have missed out on the flexibility of the pension freedoms being introduced on 6 April. However, selling an existing annuity may not be the right decision for all, particularly for those looking for a guaranteed income.
“What will be crucial to the success of these proposals will be to make sure the consultation focuses on educating pensioners and protecting them from making uninformed long-term decisions.”
Adviser view
Andy Thompson, head of sales at Workplace Solutions, which was launched last year by international firm the deVere Group, said: “With the new freedoms come risks. Pensioners, for instance, may not get good value based on age or state of health, plus there is an enormous potential for mis-selling.
“The so-called freedom of five million pensioners locked into lifetime annuities will mean there will be scammers ready to swoop. Caution is essential.”