Pensioners regret taking lump sum from their pension fund

Research from the Prudential finds that one in 10 pensioners now question the wisdom of taking a lump sum and spending the money

Nearly half of pensioners say they are living a cautious retirement amid concern about having sufficient long-term finds, according to new research from Prudential.

However despite obvious concern about their pension pots, the survey found 79% of those drawing a company or private pension in 2011 took a lump sum from their fund at retirement compared with 76% three years ago.

One in 10 of those who did take a tax-free lump sum either said they now regret the decision or that they had not fully understood the long-term impact it would have on their retirement income.

Vince Smith Hughes, head of business development at Prudential, said: "Most people with a company or private pension fund choose to take a tax-free lump sum at retirement, and for many this proves to be the right thing to do."

"However, some pensioners are beginning to regret the way they used the tax-free cash. The days of buying a shiny new car or going on a once-in-a-lifetime holiday may be gone, to be replaced by making savings and investments with the lump sum to supplement retirement income."