The Pension and Lifetime Savings Association has published the first major market-wide survey of who did what and why in the first six months of pension freedoms.

Pension Freedoms: No More Normal, is the third report in its Understanding Retirement research series.

The report was conducted to map the decision making process for more than four million individuals aged 55-70.

Of these four million, 2.8 million have at least one defined contribution (DC) pot not yet in payment; 1.8million have at least one defined benefit (DB) pot not yet in payment; and 0.5 million have both DB and DC pots not yet in payment.

The research focused on the 2.8million with at least one pot not yet in payment – described by PLSA as "the pioneers of the pension freedoms."

Within this group, the research identified three groups – actioners, investigators, and inactives.

Actioners are the early adopters – a distinct and affluent group, many of whom have experience of self-invested personal pensions or income drawdown.

Investigators are the largest group and are assessing their options – they have limited experience of drawdown, limited DC savings but are largely reliant on DC and other savings for an income in retirement.

The inactives are the most vulnerable group – many are still working and they are the most reliant on their DC savings to provide an income in retirement but have the lowest levels of financial confidence.

PLSA chief executive Joanne Segars, said the message loud and clear message from the research is that there's "no more normal" when it comes to deciding what to do with savings at retirement.

"Pension freedoms have destroyed the traditional norms leaving a blank canvas for millions of people.

"This first cohort of savers are effectively pension pioneers – working out how to make the right decision with their savings but at the same time naturally fearful of making a poor decision in uncharted territory."

Segars added that the findings clearly warn against placing too much weight on the experiences of the actioners as it's clear they are by no means representative of the 2.8million with at least one DC pot not yet in payment, nor of the longer term challenging trends that could emerge.

First published 04.02.2016

Lindsay.sharman@wilmingtonplc.com