New research from Aegon UK, carried out to coincide with the FCA’s review into how the advice market is working, found 76% were unable to make the distinction between advice and guidance.

The government is consulting on ways of extending advice to a broader section of the population.

It comes less than a year after the launch of Pension Wise, the creation of which itself initially caused a debate about guidance versus advice. The Chancellor initially spoke of offering the public free pension advice, rather than guidance.

Ageon’s survey found 27% believed that a recommendation from a friend can be financial advice while 22% counted information in their morning paper as advice. Some 26% also said information on online forums was advice.

Just 20% would be confident deciding how to access their pension, while only 12% were confident reviewing the performance of their pension or investments.

Some 75% said there should be clearer communications about the different types of financial advice and guidance available to them.

Steven Cameron, regulatory strategy director, at Aegon said: “People are being presented with choices not only regarding how they access their savings at retirement but also around how they seek help. There are lots of ways of seeking help, whether it’s through regulated financial advice, guidance via Pension Wise or information from their pension provider.

“The problem is that people are confused by what they get under each of these options and if that’s not clear, how can we expect them to make an active choice?

“The industry needs to work hard to explain how professional advice differs from guidance in terms of the responsibility advisers assume and also around access to compensation schemes if things do go wrong. We need to reduce levels of confusion and get more people seeking the right form of support for them.”