PensionsOct 31 2014

Survey shows almost half of retirees will seek advice

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Some 44 per cent of consumers who are due to retire within the next decade will be looking to advisers to help them make financial choices, according to new research from insurer Zurich.

Reinforcing this need for advice, 59 per cent of the 900 respondents who are planning to take a quarter of their pension pot as a lump sum said they would reinvest it into a savings account or an Isa.

Zurich suggested that this shows a lack of understanding of the potential tax benefits of staying invested in their pension, as moving money to savings accounts would mean that consumers would use up their annual Isa allowance without any other tax advantages and could open up potentially costly inheritance tax liabilities.

Alistair Wilson, head of retail platform strategy at Zurich, said that it is reassuring to see that consumers will be looking to advisers as they approach retirement.

“This is a complex area and so advice is key, whether it’s for those looking to make their income work as efficiently as possible or for wealthy clients seeking to gain from IHT planning.

“Consumers who make their own decisions without expert advice, risk exposing their capital to unnecessary tax.”

Mr Wilson added that with the increased flexibilities from next April people will have a great amount of personal control and freedom around how they manage their retirement. “However, it’s important that support is available to consumers so they can make the most of the new reforms.

“Advisers have a key role to play in ensuring they get the best outcomes”.

peter.walker@ft.com