State Pension  

FCA finds state pension main income for over 40% of retirees

FCA finds state pension main income for over 40% of retirees

The state pension is the main source of income for 44 per cent of retirees in the UK, a figure that jumps to 51 per cent in rural areas, according to data from the Financial Conduct Authority (FCA).

The Financial Lives survey, which was based on research involving 13,000 people, assessed the attitudes people have towards the financial services sector.

The regulator’s research found out that among non-retirees aged 45 and over, 29 per cent still expect the state pension will be their main source of income in retirement, including 35 per cent living in rural areas.

Individuals in this age group also say that they haven’t really thought about how they will manage financially when they retire.

The study also concluded that 31 per cent of adults have no private pension provision. Nearly six in ten (57 per cent) UK adults have no cash savings or savings of less than £5,000, and seven in ten (71 per cent) individuals have no investments at all.

According to Andrew Bailey, FCA’s chief executive, the survey “shows just how different the experience of financial services is for consumers across the country”.

He said: “That’s important for us, as we shape financial services policy. But it is also important for firms, as they decide how best to serve their customers.”

The regulator has released weighted data tables which provide details of the survey findings, so that local decision-makers and other organisations can use the information to consider what they can do to help support people who may be struggling financially. 

For Jane Goodland, responsible business director at Quilter, these statistics “should act as a very serious wakeup call and show how incredibly vulnerable the average UK family is in terms of their financial wellbeing”.

She said: “Government needs to scrutinise figures from the FCA’s survey as a matter of urgency.

“Battling feeble financial resilience should be at the top of its to-do list, no matter the political backdrop and despite all eyes being on Brexit.”

Other stats from the research show that only 6 per cent of adults have used regulated advice in the last 12 months – the same percentage when compared with the previous year research - with more in the South East (8 per cent) doing so than in any other nation or region.

Only 39 per cent of respondents trust financial advisers to act in the best interest of their clients.

In the last 12 months, 23 per cent of adults have experienced an unsolicited approach about pensions or investments that might be a scam. Around 69 per cent have been approached, unsolicited, by a claims management company.

Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, argued that the figures on advice take-up are “shockingly low”.

He said: “Only 21 per cent on average in the UK are satisfied with their finances, yet only 6 per cent have sought regulated financial advice.

“Something doesn’t quite add up and more education is needed to promote the benefits of proper financial planning.”