Third of over 55s don’t see value of advice at retirement
Two in five have never sought advice about their retirement options and of these, just under a third say they are confident enough to plan their own affairs, the study by annuity provider MGM Advantage found.
One in ten said they do not want to talk to anyone else because their financial affairs are private, 44 per cent believe they do not need an independent financial adviser (IFA), and 36 per cent do not know what an IFA is.
The poll of over 2,000 people found that those with household incomes under £30,000 are much less likely to seek advice than their richer counterparts, with almost half trusting their own judgement compared to just a quarter of those with incomes of £30,000 or more.
Andrew Tully, pensions technical director at MGM Advantage, said these figures were “concerning”, particularly following the reforms announced in the Budget giving retirees greater access to their pension pots.
“Given that the need for proper financial advice is even more important after the Budget proposals, it is extremely concerning that so many people do not value it and believe they are able to make decisions about how to best finance their retirement by themselves,” he said.
“If people do not seek expert help when considering their options for retirement, we could see many people making poor choices, such as paying too much tax or investing in poor value solutions.”
He suggested “soft compulsion” could be introduced to help make people aware of their options.
“We need to think about the lessons learnt from auto-enrolment, as there we have a form of soft compulsion to save. Perhaps similar prompts to use the guidance service should be considered, to ensure most people have a basic level of understanding of the myriad of options which are likely to become available before making any decisions,” he said.
Chancellor George Osborne promised all retirees access to free, impartial guidance as part of his sweeping pension reforms.