Swathes of pensioners are suffering from buyer's remorse after cashing in pensions

Oliver Gill
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The research suggests that many pensioners are not thinking of the risk to funding future years (Source: Getty)

Tens of thousands of savers are blissfully unaware of the risks of drawing cash lump sums from retirement savings according to research released today.

As part of former chancellor George Osborne's push to give Britain's retirees greater pension freedoms, a tax-free lump sum of up to 25 per cent was introduced in 2015.

Read more: Enthusiasm for Osborne's pension freedoms is waning as withdrawals fall

The initiative has proved popular with many thousands withdrawing money from schemes to invest in other financial products or use for one-off purchases. Such a decision can lead to a reduction in the funds left for later years.

And a survey by Metlife suggests that one in five (21 per cent) of those that dipped into their pension pots were unaware of the risk that they were running. Furthermore, over one in 10 (11 per cent) said they now regretted their decision to raid their pension coffers.

Read more: What pension freedoms have done to bankers' pension pots

The news was labelled "a real threat to the success of pension freedoms" by Simon Massey, a wealth management director at Metlife.

The research also showed that over half (51 per cent) of the public are placing their trust in stockmarket growth to fund the gap between what they have saved up, and what they will need, to generate sufficient retirement incomes.

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