Many retirees have misconceptions about their sources of retirement income, according to research by the Financial Conduct Authority (FCA).

In a survey of around 13,000 people, 80% of people who had accessed their pension pots in the last 2 years said they understood their options well.

Nearly half (49%) of those who had not received advice about their pensions in the last year were also confident about their understanding of pension products.

However, the findings of the FCA report suggest this confidence was unfounded, as most of those surveyed misunderstood the features of different retirement income products.

41% did not know that an annuity would provide a guaranteed income for life, and 11% thought there was a risk it could go up or down in value.

Around 3 in 10 people (31%) had not heard of a single life annuity at all.

Most retirees were also mistaken about the features of income drawdown, as 63% were not aware that the value of their investments could change.

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