The majority of consumers still want help when taking out a pension but many are confused about what constitutes advice, according to a City watchdog.

The Financial Services Authority (FSA) said while consumers could use "decision trees" - which help people assess whether a stakeholder pension was suitable for them - 60 per cent said they felt they needed more help before buying one.

It also found a similar proportion of people taking out a stakeholder pension who had not received regulated advice thought they had, suggesting consumers might be confusing the provision of information and general assistance with advice.

The FSA found that overall firms selling stakeholder pensions preferred to use their established sales methods, rather than getting people to use decision trees without advice.

But about seven out of ten consumers also said they would feel comfortable using decision trees to buy similar products.

Stakeholder pensions, which have charges capped at one per cent, are designed to be sold without the need for advice, and are accompanied by decision trees to help consumers assess whether they are suitable for them.

Four out of five people taking out a stakeholder pension said they were aware the product met certain minimum standards, but 40 per cent wrongly thought this meant there were no risks associated with the it.

Ten per cent thought it meant they were backed by the Government and their money was protected.

The research was to find out how effective the regulatory regime for the sale of stakeholder pensions was, including the introduction of decision trees.

It will also help the regulator develop a regime for the sale of the proposed new suite of stakeholder-style products, which include an investment product and with-profits fund.

Norman Digance, group manager of conduct of business standards at the FSA, said: "We will address these findings in the research when considering what changes to make in the regulation of stakeholder pensions."