Almost a third of people facing retirement will see an adviser for help when seeking pensions advice, a survey by Tilney Bestinvest has revealed, however a fifth plan to rely on their own understanding.
The firm commissioned YouGov to Total survey 2,311 adults aged 50 or over, of which 970 have paid into a pension plan but are not yet retired.
They were asked how they plan to get advice to understand pension options when they reach retirement.
Seeing a financial professional came out on top, at 28 per cent, followed by seeing their pension provider at 24 per cent and 23 per cent will see the government’s Pension Wise service.
Although the Pensions Advisory Service is providing the telephone part of Pension Wise, 17 per cent of people said they would see Tpas, 14 per cent would ask friends or colleagues and 10 per cent would use the media.
The Citizens Advice Bureau is supplying the face-to-face element of the government’s guidance service, and 6 per cent of respondents said they would see them, 4 per cent said ‘others’, 12 per cent said ‘don’t know’.
However, a fifth of people said that the question is not applicable to them, as they do not plan to get advice from anyone “in order to understand my pension options at retirement”.
David Smith, financial planning director at Tilney Bestinvest commented that while much has been written about the new retirement freedoms, the ‘devil is in the detail’ and there remain potential pitfalls which those facing retirement need to overcome.
“The change which now allows annuity holders the option to convert their guaranteed income streams into cash lump sums for example is a serious decision that could prove financially disastrous, and one which in most cases should only be taken in the light of professional advice.
“While some may feel that they can go it alone without the help of a professional, it is important to bear in mind factors such as increasing life expectancy when planning your retirement and to make sure you have a coherent strategy for your later years.”
Research by Prudential at the end of March suggested the biggest threat the success of the pension freedoms was that people would run out of money after cashing in their pensions.
Around 86 per cent of advisers surveyed also said that retirees would be targeted by risky offers from unregulated firms, although they were more optimistic about their own clients, with 59 per cent saying they are not concerned about this affecting retirement outcomes.
Regulators and industry bodies have recently warned consumers not to rush into any decisions and make sure they ignore any unsolicited offers, but in reality, so far most advisers have not experienced the onslaught of requests for at-retirement advice.
peter.walker@ft.com
