Consumer research by a financial provider has found that eight out of ten over-50s (78%) “significantly underestimate” how long they are likely to live - a gap that means many could run out of pension cash.

Retirement Advantage, which carried out the study, warns that the pension freedoms may exacerbate the issue as many have “raided” their pension pots early.

The annual Retirement Advantage Retirement Sentiment Index highlighted that both men and women aged 50-64 on average guessed their life expectancy to be 82 years old. However, analysis of official statistics shows that the average 50-64 year old man will likely live until 88, while the average 50-64 year old woman is expected to live until 90.

Retirement Advantage says that a radical rethink is required as the pension freedoms have meant many people have raided their pension pots before they reach their planned retirement age and many will be left without sufficient income if they underestimate their years in retirement.

The findings are based on the latest Retirement Advantage Retirement Sentiment Index report, using data from the 2017 Censuswide Survey of 1,005 over 50s, yet to retire, with private or defined contribution pensions, conducted in June and the 2016 YouGov survey of 1,001 UK adults over 50 with a DC pension but not yet in retirement.

Retirement Advantage says the findings suggest consumers need to get financial advice help them be realistic about the pension funds they need for retirement.

Andrew Tully, pensions technical director at Retirement Advantage, said: “The pension freedoms have given people the opportunity to plunder pension pots early, often before planned retirement ages. This is potentially storing up trouble for the future, especially if people are underestimating how long these pensions need to last in retirement.

“It’s important to remember these are averages and so the numbers mask significant differences, for example from male to female and area to area across the UK. However, there are tools available which can help people consider the probability of living to older ages.

“This is an area where proper financial advice is key. An adviser can make a plan for the personal retirement journey which considers all the risks at play whether that be investment risk, or the risk of living longer than people may have expected.”