Keep your pension invested, you're a long time retired

Us Brits are a funny lot; we take our pensions earlier than workers in any other European Union country and then carry on working. Why?

The average British worker accesses their personal pension stash at the age of 58, according to the European Commission.

This is one of the earliest date in the continent but we also have 20% of people aged 65 or over still in work – one of the highest levels of people in work.

There is a strange disconnect between these findings and I believe it stems from distrust and poor education around pensions.

State pension: how much will you receive?

Retirement fund

You see, pensions are supposed to fund retirement. It seems like a simple statement but you'd be surprised how many people see their pensions as a mini lottery win that they get at age 55 when they can access the cash. They want the money out of the pension, because they don't trust pensions, and whack the cash in the bank when it dwindles under the weight of inflation.

Then they carry on working, using the pension cash as and when they need it.

Others believe they have to take their pension at 55 or 58 or 60, or whatever arbitrary age they put down on the form when they signed up for the pension 30 years ago. You don't, you can carry on working and carry on saving – and in fact you should.

If you take your pension at 58, you still have a lot of life stretching ahead of you – potentially two or three decades. If you keep the money invested, that's plenty of years to ride out any stockmarket turbulence and bank some profits on the way, equalling a more comfortable retirement later on when you do decide to stop working.

Calculate your pension income options

Unfortunately, the distrust of pensions and the lack of communication from pension providers about retirement options is partly to blame. The new pension rules could exacerbate the problem we have further by allowing people more access to their pension cash and more chance to use the cash as a windfall rather than retirement income.

But let's stay optimistic and hope that the guidance guarantee that will accompany these increased freedoms will help retirees realise just how long they could live and what their pension savings are supposed to be for.

After all, the cash in your hand may help fund a nice holiday but the memories of that holiday won't pay the bills in your later years.

Read more:

New pension rules: how your retirement will be affected

More than one in three have no pension plans at all

Large fees threaten new pension pot rules