Many people are making a poor financial decision by taking some of their pension pot in cash, a regulator says.
Some pensioners could receive 37% more retirement income every year by investing rather than cashing in, the Financial Conduct Authority (FCA) said.
Workers should be given more guidance about what to do with their pension, and could be sent “wake up” information packs from the age of 50.
Savers can cash in their pension from the age of 55.
The reforms were introduced by the chancellor at the time, George Osborne, in April 2015. By September 2017, some 1.5 million pension pots had been accessed.
Previously, people would have bought an annuity – a financial product that provides a guaranteed retirement income – with their pension pot, although this is an option that remains open to them.