"Savers are not being offered the retirement income solutions they need because of a lack of innovation in the market and in many cases they are not receiving essential expert advice on retirement planning."
The MetLife research shows that more than one in five (21%) admit they did not understand the risks and 12% regret not taking advice before investing in drawdown.
The biggest fear for new drawdown investors is the risk of volatility - nearly half (49%) are worried about future investment market volatility while 51% are banking on growth to boost their funds.
Research among specialist advisers shows they are right to worry – nearly half of advisers (48%) report a rise in the number of drawdown clients suffering cuts to income and capital. On average advisers across the country say 25% of clients have suffered drawdown losses.
The first full year of pension freedoms has seen a rush to conventional drawdown with around 90,700 savers investing in plans compared with just 6,700 in the first three months of 2014.
But MetLife warns consumer needs for real pension freedom are not being served by the rush to drawdown and believes the industry needs to ensure that all options including guarantees are considered during retirement conversations.
Simon Massey, Wealth Management Director at MetLife UK, said: “The fact that so many drawdown customers are unhappy and did not understand the risks to their cash in drawdown is a real threat to the success of pension freedoms.
“Savers are not being offered the retirement income solutions they need because of a lack of innovation in the market and in many cases they are not receiving essential expert advice on retirement planning.
“Guaranteed solutions have a valuable role to play in delivering real pension freedom and should be part of all retirement planning conversations to avoid potential problems in the future for people choosing conventional drawdown without understanding the risks.”
