A survey by Fidelity of pension-holding Brits over 60 found that 19 per cent are more confused about their options despite the fact that most have a good understanding of the reforms announced in March, which opened the way for retirees to take their entire pension pot as a cash lump sum.

Alan Higham, head of retirement insight at Fidelity, said: “The overhaul of the pensions industry as a result of the Budget has afforded retirees new freedoms to spend their hard-earned money as they wish once they finish work.

“However it is vital that people nearing or at retirement age ensure they fully understand the implications of what was announced in order to take advantage of the new rules and make the right retirement income decision.

“They might think they know what the changes are, but when it comes to the implications, pre-retirees are more at sea than they were even before the changes were announced.”

According to Fidelity’s research, those closest to retirement felt they had the best grip on the new rules and their implications – over a third of respondents aged 60 to 62 said they had a good understanding, as did half of those aged 63 and over.

However, almost half of people in that age bracket reported feeling more confused than they had before Osborne’s Budget.

Of those who reported having a good understanding, over half plan to retire in the next 12 months. Only 10 per cent of those with a poor understanding intend to do the same.

Meanwhile, 65 per cent of those with pension pots over £75,000 claimed a good understanding, a figure that dropped to 39 per cent of those with pots equal to or below £30,000.

Higham concluded: “Clearly a strong element of confusion persists, even for those people who claim to have a good understanding of the rules.”