Two years into pension freedoms, over-55s with medium-sized pension pots say they have no regrets over their decisions, research commissioned by The People's Pension and State Street Global Advisor's has revealed.
However, people remain deeply confused over what to do with their money, even though they claim to be happy with the decisions they have made.
The study, carried out by Ignition House, found that after the initial spending rush in the first year of pension freedoms, the majority of respondents had settled down to more restrained habits.
Generally, most said they approved of the freedom and choice reforms. Those respondents who had used the freedoms to splash out on expensive treats expressed few regrets, even when they were left with little money to go towards their income in retirement.
Those who had opted to go into drawdown products or simply to leave their money invested in their pension fund also expressed little regret.
The one class of respondent that did express regret were those that used the money to purchase an annuity.
The first part of the study was conducted last May, and covered 80 people aged between 66 and 70 with pension pots worth between £30,000 and £250,000.
It asked the respondents in-depth questions about their choices, plans and concerns about the new pension freedoms.
In the second report, released today (26 April), 55 of the original 80 took part.
Given the relatively small number of subjects and the depth of the interviews, Ignition House said the results were of qualitative rather than quantitative significance.
The report stated: "One year on, the first cohort making decisions under pension freedom and choice unanimously agree that the new flexibilities have been good for them personally, and the vast majority are very happy with the decisions that they have made.
"Perhaps ironically, those feeling the most unsure about their decision are those who have not taken up the new freedoms – our annuity purchasers who chose a guaranteed income for life. Despite concerns that people will fritter their money away, our respondents appear to be showing considerable restraint."
However, while respondents were generally not splurging their cash in the ways critics of pension freedoms had feared, the interviews nevertheless revealed extreme levels of financial ignorance.
One respondent stated: "Sometimes it is best to be blissfully ignorant of what you should have done, try not to think too much. Do what you think is right and hope for the best."
Another who decided to cash in her entire pot, said: "I thought maybe I’d better cash in and have done with it, just in case it got any worse with Brexit and the markets dived, which I thought would happen."
One man invested the money in gold coins, while another invested in peer to peer lending.
A large number opted to leave the money where it was, deferring the decision to when they stopped working.
Darren Philp, director of policy and market engagement at The People’s Pension, said: "This research shows that even when savers are engaged they can still struggle to make a decision.