Investment knowledge could boost pension engagement

This means people who may previously have retired on an annuity now have access to complex income drawdown products they may not fully understand.

Mr Velani said: "The more freedom you give people the more likely it is that they are going to do something wrong.

"People find income drawdown complicated therefore putting the power into their hands can be rather dangerous."

In a paper published last month (June 30) charity Age UK warned many older people were making risky decisions when entering drawdown and were lacking access to appropriate products.

Caroline Abrahams, charity director at Age UK, said at the time: "The pension freedoms introduced in 2015 have been really popular to date and there’s no doubt that many are enjoying and benefitting from the greater flexibility they’ve been given. 

"However, we are worried that a lot of older people with small and medium-sized pension pots, who do not pretend to be particularly financially savvy, are making risky decisions that could leave them in a mess in a few years’ time, especially if there’s a downturn in the market as is bound to happen at some point."

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