Just 16 per cent of those aged 55 and over have taken independent financial advice to discuss their retirement option and 14 per cent have used the government’s Pension Wise Service, research from NerdWallet has found.

This is despite 75 per cent of pension holders surveyed stating that they do not feel confident enough about their pensions to sort out their retirement planning without seeking advice from a professional.

The survey also showed that 11 per cent of those age 55 and over have removed money from their workplace or personal pension to save into a savings account or cash ISA, while 9 per cent had removed money from their pension to invest it into a stocks and shares ISA.

In addition to this, a further 8 per cent said they removed money from their workplace or personal pension to invest into property.

The company warned, however, that whilst these decisions may have been the correct thing to do, respondents may have taken a different approach after seeking advice on long term financial goals, risk appetite and tax consequences of a pension withdrawal.

Indeed, the survey found that 7 per cent of over 55s thought they had reacted too quickly to market downturns in the past, such as those recently seen in March 2020 amid the onset of Covid-19, and 4 per cent had fallen victim to a pension scam.

NerdWallet senior pensions expert, Richard Eagling, commented: “Pension freedoms have proven very popular since they were introduced in 2015 but, in opening up more options, they have also put retirees under immense pressure to make the right decisions when withdrawing money from their pensions.

“Unfortunately, very few individuals are accessing the guidance and advice available to them, leaving them vulnerable to making decisions that could be detrimental to their own retirement dreams.”

Previous research from NerdWallet suggested that this trend was more prominent amongst younger savers, with 36 per cent of pension holders aged 18-24 preferring to invest in stocks and shares ISAs, while 35 per cent favoured cash ISAs.

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