The viability of the governments pension liberalisation reforms could be undermined if pensioners start to run out of money before the end of their life, financial advisers have warned.
A poll by the insurance firm MetLife found that 77% of the 114 specialist retirement advisers believed that pensioners running out of money was biggest threat to the change.
In this year's Budget, Chancellor George Osborne announced the reforms, which will remove the need to buy an annuity with a saved pension pot. Pensions minister Steve Webb then famously said it was people's choice whether to buy a Lamborghini sports cars with these savings once the reforms take effect next April.
However, according to the poll, the risk of people spending down their savings is the biggest challenge to implementing the plans, ahead of the launch of the government guidance sessions and access to advice.
Dominic Grinstead, managing director of MetLife UK, said the introduction of reforms could be used to create a world-leading pensions system.
'But clearly there are concerns and advisers believe the biggest risk to the success of the reforms is people spending all their money and running into trouble as a result,' he said. 'Annuities did at least provide an income for life although they had many other major flaws.'
Grinstead said advisers have a vital role to play in ensuring savers were aware of all their retirement income options.
He called for a new guaranteed drawdown option to be recognised in the guidance service being launched by the government to coincide with the changes.
This could allow pensioners to take advantage of the new flexible pensions framework while retaining the security of income for life, Grinstead said.