Most people approaching retirement want to use their pension pots to deliver a secure guaranteed income for life, but many may be too confused to know how to achieve it.

A major piece of research by the International Longevity Centre, supported by EY, Just Retirement, Key Retirement, insurer LV, and older workers' tsar Dr Ros Altmann, has found consumers ill-equipped to handle George Osborne's new pensions freedoms, which will enable over-55s to convert personal pensions into cash from April.

In a representative sample of 5000 people aged 55 to 70 who are yet to retire or draw on their private pension wealth, nearly 70 per cent favoured using their pot to deliver a guaranteed income, with protection against inflation a big priority.

Only 7 per cent said paying for big ticket items such as holidays or a car was most important, and 5per cent said paying off debt was the priority.

Three quarters of people across the entire survey agreed that they would " prefer a secure guaranteed income over an income that might rise or fall depending on financial markets". Over a third said they could not afford to lose any of their fund, with only 7 per cent prepared to lose 20per cent or more.

Only half those with a DC (defined contribution) pension said they understood what an annuity was quite or very well, and only 20per cent understood what an enhanced annuity was (one that pays a higher income to those with health impairments).

Only 35per cent said they understood income drawdown- keeping your fund invested and taking income from it. Women were consistently less financially aware than men on all measures, and across the entire survey just four in 10 had made a plan - even amongst those who were less than one year from retirement.

When pressed on how to reduce their tax burden when withdrawing money from the pension pot, only half gave the correct answer that you should withdraw it in small amounts over a number of years. One in 10 wrongly thought that the best thing would be to withdraw as one big lump sum.

However research by retirement income specialist MGM Advantage claims the situation is more serious, with 59per cent of people it surveyed aged over 55 saying they did not understand the tax implications of pension cashing-in.

David Woodhouse, head of advice services at Chase de Vere, says the 'Pension Wise' guidance service promised by the government to everyone will not be able to review their full circumstances in a one-off 30-minute or hour session. He adds: "We also have some concerns about the qualification levels and experience of those giving the guidance."

It was revealed earlier this month that only phone-based advice provided by the Pensions Advisory Service will be manned by people trained in technical pensions advice, with face to face sessions at Citizens Advice offices left in the hands of general advisers.

Mr Woodhouse commented; "So we have the prospect of inadequate sessions which don't cover all of the relevant facts needed to make informed decisions, potentially delivered by people who aren't pension experts and with no ongoing help or assistance provided. This means that the only guidance that should be given to many people must be to seek independent financial advice."