Almost half (49%) of employees aged between 50 and 59 do not know how they will access their pension savings, according to research by workplace pensions provider TPT Retirement Solutions.
Its survey of 2,500 defined contribution (DC) members also found that 23% of respondents would draw it down over time, 16% would take their pension as a lump sum, and just 6% plan to buy an annuity.
The findings highlighted that respondents approaching retirement were more confident and engaged with their pensions than other demographics. However, 30% of respondents overall do not know how to make retirement decisions and worry about how to access their pension savings.
More than one-third (37%) of respondents said they lacked confidence in their savings lasting for the duration of their retirement and 36% expressed worries they will not have sufficient savings to be comfortable.
Despite this, only 8% have used a financial adviser for help with their pension, and 6% have used the free government pension guidance service Pension Wise.
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Philip Smith, DC director at TPT Retirement Solutions, said: “The lack of confidence and knowledge expressed by savers, particularly when approaching retirement age, is worrying. Similarly, the reluctance to pay for professional advice may result in high levels of anxiety and a lack of preparedness as savers approach retirement.
“DC pensions firmly put responsibility for members’ financial futures in their own hands. Helping people understand how workplace pensions work is, therefore, essential. If we want savers to take an active role in their retirement planning, it’s imperative that employers and trustees provide them with the right information, tools, and support to enable them to make informed decisions. Over the last few years, improving members’ understanding of pensions has been one of our top priorities.”