Poor choices in pension savings can lead to people feeling “depressed in later life”, according to the English Longitudinal Study of Ageing (ELSA) study.

Research by Legal and General and Demos revealed that the biggest impact was on Britain’s 50 per cent poorest retirees. Of those on poor or modest incomes, 19 per cent who put their money into investments have not enjoyed their life over the past week, compared to 9 per cent of those with a guaranteed income.

According to the findings, 13 per cent of retires who didn’t have a guaranteed income said they couldn’t plan for the future, compared to 5 per cent of those who did have a guaranteed income product.

Over a third (38 per cent) of people who put their money into investments said they felt they couldn’t control their future, while 22 per cent said they had felt ‘sad’ for much of the past week, compared to 15 per cent of retirees who knew what they would be getting month-to-month.

Retail Retirement Income managing director, Emma Byron, said: “Our research with Demos shows that in the face of more choice, consumers need better guidance and support to understand how the financial decisions they make can affect their retirement journey.

“Pension freedoms is still settling into the retirement landscape, but it is clear that thousands of consumers are potentially choosing or defaulting into options which could be damaging not just for their financial circumstances, but for their health and wellbeing too.”

Since 2015, 187,000 people have taken out an annuity, compared to more than 436,000 drawdown customers.

Byron added the industry had a “duty of care” to support customers about their decisions in later life, and that more must be done to “engage the public” to guide them towards a better retirement.

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