Concerns that an adviser would not act in their best interest is deterring almost half (45 per cent) of individuals from seeking advice when accessing their pensions.
According to research from fintech provider Evalue, published today (July 10), out of 1,000 individuals aged over 50, 43 per cent worry that advisers are focused on achieving the best returns, regardless of whether this is the best outcome for the client.
In addition, nearly half (44 per cent) are put off going to an adviser due to the perceived cost of advice.
Evalue found that 59 per cent of the people asked sought retirement advice from partial or unqualified sources rather than engage an IFA.
Of these 37 per cent would turn to their pension provider for advice and 13 per cent would go to their bank.
In addition, 12 per cent said they would look to the Financial Conduct Authority (FCA) to advise them on their personal retirement planning needs.
Despite many people not understanding their pension, 47 per cent have never sought advice about their retirement plan.
Nearly a third (29 per cent) said they would not seek any further professional financial advice after they retire even though many don't know how much money they have in their pot or how much they need for their retirement.
Evalue chief executive Paul McNamara said: "As an industry, we need to pool insight to better our collective understanding of the root causes of the advice gap and to help consumers to act in their own best interests when it comes to planning effectively for their retirement.
"The value of timely, professional advice has been proven time and again, and while the perceived cost of that advice is turning off some people, our findings show that is not the biggest contributing factor for consumers not seeking advice."
Of the 1,000 respondents, 690 were UK adults aged over 55, the age at which they can start drawing on their pension savings.
According to Evalue, about half of individuals were unlikely to consider drawdown either due to perceived complexity or a lack of trust in investment markets, suggesting that they are instead taking their pension as a cash lump sum.
Meanwhile, 12 per cent said they would consider drawdown, but would not have confidence in the plan.
Mr McNamara said: "The fact that our research shows such a high percentage of consumers, who are at the age they can draw on their pension assets, are labouring under some pretty fundamental misunderstandings and have such deeply held misgivings about our sector, it leaves them wide open to pension scams."
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