Savers welcome new pension freedoms but lack confidence navigating more complex options now open to them, Nest has reported.

Ignition House conducted qualitative research on behalf of Nest looking at savers across the country who are approaching retirement to understand what retirement income options they were looking for.

The research looked at basic rate tax payers with DC pots between £20,000 and £50,000, as well as those with larger pots.

While people place great importance on flexibility, many voiced concerns about making the ‘right’ decision and worry about having to continually make complex decisions throughout their retirement.

‘Lifetime income’ strategies which essentially ‘do the hard work for them’ were preferred, including Nest’s Blueprint, which combines flexibility, security and ‘rainy day’ cash with professional management of investment and governance of a regular, sustainable income.

Ultimately, the research concluded that savers generally want access to products that combine the flexibility of drawdown, the security of annuities and the accessibility of additional ‘rainy day’ cash. This was found among the majority of savers, including those with the smallest pots.

Furthermore, Nest conducted additional quantitative data which found that 92 per cent of people agreed that a regular income for life was important, very important or essential. Ninety five per cent also said that flexibility in a scheme was important, very important or essential.

Nest Corporation chair Otto Thoresen commented: “Millions of people being brought into pension saving through auto enrolment will typically have small pots when they come to take their money out, but it’s clear that many want to take full advantage of the flexibilities and options. And why shouldn’t they?

“However, working out what to do with your retirement pot requires a complex set of decisions and an in-depth knowledge of the options available to you.

“There’s clearly an appetite for products that will provide flexibility but don’t require lots of complex decisions by consumers. The challenge is how to provide this at low cost to people with small pots.”

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