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It found a similar number (12%) had withdrawn from their pension during the crisis without seeking financial advice.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 ones’ self 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."
The research comes as the regulators found £30m was lost to pension scams in the past three years, particularly by men in their fifties.
Figures from HM Revenue & Customs for the first quarter of 2020 showed 348,000 people had made withdrawals from their pension, taking out £2.5bn, a 19 per cent increase from the £2.1bn taken in the same period in 2019. But the full effects of the pandemic remain to be seen.
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.
Almost half of respondents would prefer for their employer to manage their pension for them.
Mr Megson said: “It is vital consumers seek independent financial advice before making any major financial decisions. Affordable advice is available, and it minimises the risk of consumers wiping out their finances.”
Tim Morris, an independent financial advisor at Russell & Co, said leaving pension management to employers can backfire: “As successful as auto enrolment has been, there is always the risk that many of those 10 million scheme members think their employer is ‘managing’ their pension on their behalf.
“I’ve heard examples where scheme members have stopped paying in as they reach retirement, and are informed by their provider they can take the money flexibly.
