New research by retirement financial advice firm Responsible Life shows that 75 per cent of pensioners with their pots invested have insufficient reserves to fall back on should the market encounter a major shock.

They polled just over 1,000 UK pensioners and concluded that 45 per cent of those who use drawdown rather than buying an annuity have no reserves to call on if share prices fell significantly.

Of the remaining pensioners, 30 per cent admitted that they had so little in reserve that it would be used up quickly should they ever need to tap into those savings.

Steve Wilkie, managing director of Responsible Life, said retirees who invested their pensions might have seen it pay out dividends in recent years, but warns: “The outlook has changed and they are now at the mercy of market forces.”

The findings come in the wake of recent turbulence in the global markets. This volatility resulted in 95 per cent of the respondents being anxious about their retirement plans and standard of living if the volatility worsened.

The research showed that 61 per cent of retirees have kept their personal pension invested with more than half (55 per cent) now wishing they had taken out an annuity.

Mr Wilkie concluded: “It means many people with no additional savings who worked hard to save a substantial nest egg face Hobson’s Choice — continue to live off their pension and damage it severely in the process or become a spendthrift.”

What would happen to YOUR retirement plans if the market fell substantially? Do you know how much you could spend each year if your investments went down rather than up? You can run through as many different “what-if” scenarios as you wish using the Classic and Premium versions of RetireEasy LifePlan.