The coronavirus crisis has pushed pension savers towards riskier assets, according to advice firm My Pension Expert.
The adviser found one in eight savers had moved their pension funds into a higher-risk investment to make up for lost value during the market turmoil caused by the pandemic.
It found a similar number (12%) had withdrawn from their pension during the crisis without seeking financial advice.
In its survey of 2,000 UK adults in late July, My Pension Expert found 84 per cent of Britons had a pension and were putting an average of 3.8 per cent of their income towards their pension each month.
But a third of those people admitted they did not know how their pension actually works.
My Pension Expert warned acting on a pension without the relevant knowledge was a dangerous move that could lead to losses.
Andrew Megson, executive chairman at the firm, said: “Retirement finance is a complicated subject, with lots of rules, regulations and products to navigate. That said, distancing oneself from pension planning entirely can be damaging.
“Failure to understand how their pension plans work, or where it is invested, could mean Britons are trapped in schemes which offer little value, or they could face hidden charges.
“Worse still, it could lead to ill-informed decisions, such as withdrawing too much too soon or moving savings to risky investments – potentially leaving consumers worse-off in the long run.”
My Pension Expert also found that despite having a pension, 41 per cent of respondents admitted to having no clear strategy in place for their retirement finance, saying they were instead putting the matter off until a later date.
Tellingly two thirds have never sought any form of financial advice about their retirement although 28 per cent said they would like to but believed it would be too expensive.