Retirement expert issues warning to every person in their mid-50s

Retirement expert Helen Morrissey is warning that more than half of over 55s don’t know what their retirement options are. The head of retirement analysis at Hargreaves Lansdown highlights new research which suggests that only 39 per cent of people agree they have a clear understanding of their retirement options.

The survey of 1,500 people carried out by Opinium on behalf of Hargreaves Lansdown in April 2025 also found that confusion remains, even for those close to retirement age – only 45 per cent of over 55s understood their retirement options.

However, there are a variety of different options available that can be used in isolation, or together, to deliver a retirement income. A lack of understanding risks people making poor choices and shows the importance of increased support.

Ms Morrissey explained: “We make some of our biggest financial decisions around retirement. Deciding when and how to retire, as well as how to draw an income, is hugely important – and, in the event of annuity purchase, irrevocable. However, the data shows there are worrying gaps in our knowledge that risk the wrong decisions being made.

“Only 39 per cent of people said they had a clear understanding of their retirement options. The remainder either said they didn’t or just weren’t sure. For many, these decisions are many years away, and there’s time for them to do their research.

“However, digging a bit deeper shows that even for over 55s there’s a knowledge gap that needs to be addressed. At this age, many people may not have stopped work, but they can access their pension, and so the fact that only 45 per cent of them said they clearly understood their options is concerning.

“At this stage, many people will be giving retirement more serious thought. Some may have a clear retirement date in mind, others may look to take a more phased run into it by winding down work over a number of years. These decisions will have big impacts on how income is taken so needs to be planned for.”

The retirement expert said the key questions you need to be asking yourself include:

• Do you want a guaranteed income for life?
• Are you willing to continue to take investment risks with your pension?

Ms Morrissey continued: “If you opt for an annuity, you need to think about what type best suits you – do you need to make provision for a spouse? Do you need an inflation linked product or level? Will you annuitise your entire pension in one go or are you looking to annuitise in slices as you age?

“Considering these options is vital, as once bought, an annuity cannot be unwound, so if you make a mistake then you will be counting the cost for a long time to come. Similarly, with income drawdown, you need to understand that your pot remains invested in the markets and be comfortable with the risk of that.

“As none of us know how long we will live, you need to be aware of the perils of taking out too much too quickly and the problems that may cause. You also need to think about what happens if markets dip and what it means for your budget if you have to cut back withdrawals.

“We advocate people in drawdown keep between one and three years of essential expenses in an easy access cash account, so they can use this money to supplement their income in volatile times.”

She added: “It’s important to make use of all the support that is available out there whether that be financial advice or guidance services such as government backed Pension wise. The Financial Conduct Authority’s work on the advice guidance boundary will also spell good news as it will enable providers to offer more support than they previously have been able to by letting them suggest more personalised options.

“Being able to offer such support could be a real gamechanger in helping people make more informed choices around retirement.”