Over half (51 per cent) of people aged 65 and older recommend waiting until reaching state pension age before using retirement funds, according to new research from Just Group.

The study, which asked those surveyed to imagine themselves at age 55 with £100,000 in pension savings, found that those aged between 40 and 55 were less likely to opt to keep the savings invested until state pension age (30 per cent).

Therefore, seven in 10 of the 40-55 year olds surveyed said they would start to use their savings at 55 to provide either cash lump sums or income.

Just Group group communications director, Stephen Lowe said: “The research suggests that those with experience of retirement and living on a pension see the benefit of keeping funds invested for longer.”

The study highlights a disparity between the generations when it comes to when to use pension savings, and those aged 65 and over may have the benefit of hindsight to recommend savings patience.

Pension freedom and choice rules have made it easier for savers to access their pension fund, as DC pensions are now available at 55, and those aged 40-55 seem to want to take advantage of the changes.

Pension fund withdrawals have been increasing since the introduction of freedoms and the second quarter of 2018 saw £2.27bn withdrawn by 264,000 individuals, the highest level since freedoms was introduced. Approximately £19.72bn has been withdrawn in total since the changes in 2015.

Lowe continued: “It suggests that many people now thinking of taking pension money at 55 may look back in the future and regret that decision. As the saying goes ‘just because you can doesn’t mean you should’ – and the same applies to accessing pensions at age 55.”

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