More than a third (35 per cent) of pension holders, equal to 10 million savers, know nothing about product options at retirement and the pros and cons of each option, research from LV= has revealed.

The survey from the pensions and retirement specialist also found that a further 22 per cent of those planning to retire in the next five years know nothing about product options at retirement.

In addition to this, over a third (35 per cent) of pension holders were found to know nothing about how stock market falls could affect their retirement savings, while 34 per cent, equal to around 9.9 million savers, did not know how to avoid running out of money in retirement.

Around half (76 per cent) of people with a pension over £100,000 also stated that they know either nothing at all or only “a bit” about how to take money from their pension in a tax-efficient way.

Despite this lack of understanding, the survey found that around 39 per cent of pension holders were planning on taking financial advice when they retire, with 31 per cent, around 8.3 million savers, instead planning to DIY their retirement.

Furthermore, just over half (52 per cent) of mass affluent people, those with of between £100,000 and £500,000 excluding property, were planning to take financial advice, with 20 per cent unsure if they will.

This is perhaps unsurprising, given that nearly half (46 per cent) of non-advised mass affluent people said they could make financial decisions on their own, while 27 per cent of mass affluent savers don’t want to pay for financial advice.

A further 20 per cent also believed it would be too expensive, while a quarter (25 per cent) did not believe financial advice offered good value for money.

More broadly, the survey found that fewer than a third (31 per cent) of UK adults thought people should see a financial adviser when deciding how to access pensions at retirement.

In light of the findings, LV= managing director of savings and retirement, Clive Bolton, emphasised that people planning for retirement should think hard about what they want to do when they eventually stop work, highlighting the importance of professional advice.

He stated: “The more enthusiastic you are about retiring, the more likely you are to develop a robust retirement plan. Consulting a financial adviser is a good way to ensure you achieve the retirement you want.

“People have a series of big decisions to make as they approach the end of their working life and each one can make a huge difference to their retirement.

“For example, should they drawdown their pension in one go or over a period of time? Should they take their 25 per cent tax free cash or leave the money in their pension fund to grow? Should they buy an annuity to guarantee an income for the rest of their lives or go for drawdown? These are questions a good financial adviser will help answer.

“Taking financial advice is an excellent idea because it compensates for the emotional biases people have when they make big financial decisions. A DIY approach to managing large pension funds at retirement is fraught with risk.

“People can easily buy the wrong products, incur unnecessary tax bills or simply exhaust their retirement funds too quickly but an adviser will provide an impartial, cool-headed approach to their client’s finances and offer solutions that the client will not even have considered.

“Planning for retirement is complex. Doing your research and taking financial advice is good way to guide consumers through their options and ensure they get the retirement they want.”

Industry experts have also recently emphasised the need for savers to take advice at retirement, after previous research from Just Group found that the "vast majority" of savers were taking a DIY approach or undertaking no planning at all.

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