Personal Pension  

Three-quarters of retirees have not taken pension advice

Three-quarters of retirees have not taken pension advice

A new survey has revealed more than three-quarters of people approaching retirement have never sought professional financial advice in relation to their pension, while more than a third have not sought help or support of any kind.

The figures come from a YouGov poll of 943 people aged 45–65 conducted on behalf of Old Mutual Wealth in February, ahead of changes in April which will allow full access to pension savings from the age of 55.

The research reveals 35 per cent of people have never sought any kind of help about their pension savings, while 23 per cent have previously taken financial advice, 17 per cent have spoken to their product provider or have done their own research online, and 16 per cent rely on help from friends and family.

On a positive note on the new government guidance service, Pension Wise, 40 per cent of the 45-65 age group are already aware of the brand even though it is yet to launch in full and despite claims that engagement and eventual take-up will be low.

Old Mutual referenced findings of a previous study which found only 17 per cent of individuals understand income drawdown, which is set to become a more mainstream retirement option come 6 April.

A study conducted by YouGov on behalf of the firm in December found consumers who obtain regulator financial advice can expect to see a 49 per cent increase in retirement income compared to those that did not.

Paul Feeney, chief executive of OM Wealth, said: “The new pension freedoms are great news because they give people control over how they can access their retirement savings but they could be a disaster without financial advice.”

He admitted that people are reticent about seeking advice, but do not need to be. Mr Feeney also pointed out that all advisers within its Intrinsic network are on the Money Advice Service retirement directory, which will be used to refer people to advice following their guidance session.

“I think there will be a flood of demand for professional financial advice after the reforms come in, as people focus more closely on their pension savings.”

Michelle Cracknell, chief executive of The Pensions Advisory Service, added: “It is encouraging to see that people have heard of Pension Wise and we hope that this awareness grows when the first wave of retirees experience the guidance.”