Britons are hungry for advice in the lead-up to their retirement, but their needs are not being met by the industry due to the cost of the advice model, research has shown.
In a study of 58-75-year-olds by Dunstan Thomas, 25 per cent of those surveyed said they plan to, or have used regulated financial advice to gain more information about pensions before they retire.
But certain hotspots of hunger for advice appeared, mainly consumers wanting guidance at the point of retirement on what income they could draw down.
Topics highlighted by respondents where they wanted more information included setting affordable drawdown rates and optimising retirement income, inheritance tax planning and advice around equity release and downsizing.
Adrian Boulding, director of retirement strategy at Dunstan Thomas, told FTAdviser the data shows a desire in the population to take advice, particularly around the transition to retirement.
“There is a shortage of financial advice, it has come as a result of the way the price of advice has increased with higher compliance burdens,” he said.
“Advice has become the preserve of the wealthy.”
The research also showed the breadth of advice requirements. There was a decreased appetite for investment advice, it showed, with consumers happier to invest through DIY platforms.
Some 1,272 baby boomers were questioned by Opinium on behalf of Dunstan Thomas between January 28 and February 2022.
Dunstan Thomas highlighted the need for more awareness around pensions, with the report exposing low levels of response and engagement from boomers.
Some 40 per cent of those surveyed said they did not remember receiving their “Wake Up Packs”, and 30 per cent said they had “definitely” not received the pack from their pension provider.
Just 15 per cent said they remembered being offered investment pathways over the past year.
Boulding said this suggested engagement in the run-up to retirement is still a “big issue”.
He said: “Providers need to work harder to craft high quality, more interactive, timely, personalised, and engaging communications, delivering this across policyholders’ preferred digital channel, if they are going to help their customers to optimise their retirement incomes and make better retirement choices.
“It’s time now to pension off paper communications – people can learn so much more from an interactive online experience.”
His comments on using online communications echoed those made last year by Money Alive founder Andy Kirby.
At the time, Kirby told FTAdviser: "We’ve found younger people welcome and enjoy this approach as they are used to technology providing information as and when they want it."
DC vs DB pensions
The research showed the use of DB versus DC pensions in retirement.
Some 24 per cent of respondents had non-workplace defined contribution personal pensions or Sipps, with 19 per cent having occupational DC pensions.
Nearly half, 48 per cent, of baby boomers had defined benefit pensions. Of that 48 per cent, on average the respondents were planning to derive 51 per cent of their total retirement income from these pensions.