‘Worryingly’ low uptake of financial advice persists in retirement planning

“Worryingly” low levels of savers are seeking financial advice when planning for retirement and making other financial decisions.

According to a recent survey by Aegon that assessed how people make financial decisions, only 10 per cent of people currently speak to a financial adviser about their finances, up from 8 per cent in 2016.

Aegon highlighted that while the numbers of people accessing their pensions flexibly through the pension freedoms has grown, 32 per cent of those going into income drawdown did not use an adviser.

Aegon pension director Steven Cameron said: “Making the right decision on your retirement finances is hugely important and really should be done only with the help of a professional adviser.”

From its findings Aegon highlighted key reasons where savers should speak to a financial adviser when planning for retirement. These being: selecting a pension product, planning retirement goals and investments, checking if enough is being paid in in the accumulation stage and deciding how to withdraw pension savings.

Other reasons also include: consolidating your pension savings into one pot, transferring providers, transfers out of a defined benefit scheme, reviewing investment performance or changing funds and inheritance tax planning.

In addition, the survey noted that almost half, 47 per cent, of participants said that they made financial decisions on their own, while 40 per cent stated that they made decisions with their partner or spouse.

Cameron commented: “The increase in the number of people speaking to a financial adviser is encouraging…However, overall, take-up of financial advice remains worryingly low.

“If people are unsure if they need advice, they might first make use of free sources of guidance available, for example from Pension Wise on pension freedoms. Providers and some employers can also provide basic information. But for the more important or difficult decisions people should seriously consider paying for financial advice. In many cases, the benefits of getting things right can far outweigh the costs. It might be money well spent to ensure they are doing the best they can for their financial futures.”

“Both the regulator and the government are keen to make advice and guidance more accessible to more people, and their Financial Advice Market review led to a range of initiatives. However, while advisers support the aims of these measures, Aegon research shows they are sceptical these are making a difference in practice,” he added.

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