Almost half (49 per cent) of working people approaching retirement, aged between 50 and 59, don’t know how they will access their pension savings, research from TPT Retirement Solutions has found.

The survey found that just under a quarter (23 per cent) of those approaching retirement said they would draw their pension down over time, while one in six (16 per cent) said they would take it as a lump sum, and 6 per cent plan to buy an annuity.

Since pension freedoms came into force in 2015, defined contribution (DC) pension savers over 55 years old have been able to actively choose how to use their savings.

However, TPT Retirement Solutions said that its survey showed that those approaching retirement were more confident and engaged than other demographics as 30 per cent of all pension savers confessed that they don’t know how to make retirement decisions and worry about how to access their pension savings.

The most common response to the survey was uncertainty, even for those claiming to be confident in making retirement decisions.

Despite the uncertainty, 8 per cent of savers said they use a financial adviser for help with their pension, while 6 per cent have used Pension Wise.

Respondents also raised concern about their level of saving, with 37 per cent of those approaching retirement lacking confidence in their savings lasting for the duration of their retirement.

Furthermore, 36 per cent expressed worries that they will not have sufficient savings for a comfortable retirement.

TPT Retirement Solutions DC director, Philip Smith, said that the lack of confidence and knowledge expressed by savers, particularly those 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,” he added.

Smith explained that DC pensions “firmly” put responsibility for members’ financial futures in “their own hands”, arguing that helping people understand how workplace pensions work is “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,” he continued.

“Over the last few years, improving members' understanding of pensions has been one of our top priorities.

“We’ve introduced an extensive suite of support, initiatives, and educational tools, including an educational site for DC savers, personalised video annual benefit statements, a comprehensive new-joiner engagement programme, new pension savings tools and a series of live educational pension planning webinars.”

TPT also revealed that, as a result of this engagement, 43 per cent of active members regularly review their pensions compared to 35 per cent who did last year.

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