More than 51 per cent of people of state pension age have done no financial assessments or sought professional help, research has found.
A study carried out by retirement specialist Just Group showed the vast majority of retired people in the UK have given up work without seeking help from any expert source such as a professional adviser or the government’s free, impartial pensions guidance service.
According to the study, which was conducted among 1,043 UK retired and semi-retired adults aged 55 and over, 30 per cent of people said they didn’t do any financial assessments; they just retired without carrying out any assessment.
However, this figure rose to 51 per cent of those who retired when they started to receive the State Pension. And 13 per cent said they had no time to plan because they were forced to retire.
Stephen Lowe, group communications director at Just, said: “Stopping full-time work is a huge financial step and involves complex choices. Yet most people take a DIY approach and go it alone rather than engaging professional help.
“While not everybody will have access to an adviser or will want to pay for regulated advice, that doesn’t explain the very low number benefitting from the free guidance from Pension Wise which is available to all those aged 50+ with a defined contribution pension.”
The study also found:
- One in 10 retired and semi-retired people aged 55+ (10 per cent) saw their own financial adviser
- Some 4 per cent saw an adviser arranged by their employer and 4 per cent used the free, independent and impartial Pension Wise guidance service.
- Among the 55-64 age group, 9 per cent used Pension Wise, still far below the government’s stated ambition to make it ‘the norm'.
- The majority of people took the DIY approach or did no planning at all. Four in 10 (40 per cent) said they conducted their own review of their personal finances to assess their income and outgoings in retirement, a figure that was nearly twice as high among men (51 per cent) than women (27 per cent).
Earlier this year, Royal London interviewed 4,000 people to understand why so many people don’t seek advice on their finances. It found that by far the biggest reason was the belief that it’s too expensive.
Some 47 per cent of people who hadn’t taken advice cited this as the main barrier, despite 40 per cent of those having no expectation as to what an adviser might charge.
Similarly, research by Netwealth earlier this year said while the pandemic has made people more engaged with their personal finances, only one in seven relied more on financial advice highlighting a more independent approach to finances.
As reported in FTAdviser, Netwealth's February survey of 2,000 adults aged 35-plus found two in five (41 per cent) said they were more engaged with their personal finances throughout the pandemic than in previous years.
But the research also found only 15 per cent said they relied more on a financial adviser or wealth manager during the pandemic compared with previous years.