- Cost still the main barrier to the over 50s seeking advice
- Improvement in trust offset by increase in the number of over 50s looking to use the Pension Wise guidance service
- Following Pension Wise, the internet is still the second most popular method to seek information on retirement options
New research1 from Canada Life has found that fewer over 50s than ever plan to consult a professional financial adviser for information on their retirement options, with less than 1 in 3 (31%) planning to do so – a stark fall from 2 in 5 (42%) last year.
The findings come from Canada Life’s latest annual Retirement Sentiment Index report, which reveals that the Government’s pension guidance service Pension Wise is for the first time the most popular source of information - 46% of over 50s plan to use the service, up from 42% in 2017. Internet research sees a sharp decline but is still the second most favoured option for over-50s (36%, down from 44%) while 1 in 3 (33%) say they will get information from their pension provider, down slightly on last year (35%).
However, the research shows that the fall in the popularity of professional advice isn’t being driven by a distrust of advisers. Having been the most common reason given for not consulting a professional adviser at 38% in 2016, this is now the third most common at just 28%.
Instead, the move away from advice looks to have been driven by concerns over cost. This has been the most common reason given for not consulting an adviser for the last two years at 42%. However, the promotion of Pension Wise is also having an impact, with 17% of over 50s saying they don’t plan to consult an adviser because they believe the Government is recommending using Pension Wise (up from 12% in 2017).
Andrew Tully, Pensions Technical Director at Canada Life, said: ‘The increase in trust for professional financial advisers is good news, but it is concerning that people appear to be turning their back on advice because of the promotion of Pension Wise. Hopefully people will view Pension Wise as a first step towards seeking full advice.
‘Just as the pension freedoms have created additional complexity, more people have decided to DIY retirement. These decisions are being made in part due to the perception about the cost of advice, but also because people show a high level of confidence in being able to make complex decisions on their own.
‘Part of the solution will come from tackling the advice capacity issue – there are around 25,000 registered advisers in the UK, compared with around 400,000 people who reach retirement age each year. Developing streamlined advice models that can engage and cater for the many people either unwilling or unable to pay for advice will be vital.
‘Ultimately, there is no substitute for the benefits of professional advice.’
The data in this release is taken from Canada Life’s annual Retirement Sentiment Index, which is based on data from the following sources:
1. Censuswide polling conducted online between 06/03/2018 and 09/03/2018, surveying 1,003 UK adults aged 50 and over who are not retired and have a defined contribution or individual pension in place.
2. Censuswide polling conducted online between 28/06/2017 and 29/06/2017, surveying 1,005 UK adults aged 50 and over who are not retired and have a defined contribution or individual pension in place.