Millions of people in the UK have been warned they are in danger of “running out of money” during their retirement.

Experts are urging everyone to check the level of their pension contributions to make sure they are saving enough for retirement.

While everyone is generally entitled to 25 percent of their pension tax-free when you retire, if you take a large lump sum out or do not have enough in your pot, you could risk running out of cash in old age, experts warn.

Rowan Harding, financial planner at Path Financial, explained: “When you’re approaching retirement, you will have to decide when and how much of your pot you should take. This will have big ramifications in terms of what you’ll get and how long that cash will last.

“There is a minimum age, currently 55, when you’ll be able to take some or all of your pension money. But accessing your pension too early may not be sustainable in the long term. It takes careful planning to understand when, how and what when it comes to taking your pension.

“While taking more from your pension pot early on could work for some, for example those who have a serious illness and need the funds to pay for treatment, the key aspect of pensions is that they are sustainable.

“Your pension is meant to last. As financial advisers, the most common question we get about pensions is ‘have I got enough in it?’”

Rowan notes that the freedom to choose what to do with your pension is part of the excitement of that part of your life. But your pension freedom often starts way before retirement, as soon as you start paying in to your pot. Everyone has the freedom to choose where their hard-earned money goes.

David MacDonald, founder of Path Financial, added: "Most people are unaware that you can move your pension, so it aligns more with your ethics, and that should be what people are considering as well as how much is in it."

He encouraged people to think about switching to more eco-friendly investment pots as these can make a big difference for the planet, adding "the more people keep saving into green pensions the better".

In most cases, people will only get 25 percent tax-free on defined contribution pensions, after which you will be liable to Income Tax on any earned income after you’ve been paid £12,570, which is the current Personal Allowance and has been fixed since 2021/2022.

The amount of Income Tax you’ll pay depends on how much income you get above the Personal Allowance.

If you also get the full State Pension, you will not pay tax on that, but it will count towards your Personal Allowance.

So, if you receive income from a defined contribution pension, your first 25 percent will be tax-free, and you will then pay tax on anything above £1,067 as the full State Pension adds up to £11,502.40.

The way the tax works on receipt of pension income is dependent on lots of different factors and it is always best to speak to an expert if you want your income to be tax efficient.