Many over 55s are unlikely to seek advice on their retirement options, with many thinking they don’t need it, according to new research.
The research, released today by MGM Advantage, found that many of those due to retire in the next ten years or so would be reluctant to take up the guidance offered in this year’s Budget statement.
A third (33%) of adults aged 55 and over and not yet retired, said they wouldn’t value financial advice at all when it comes to retirement. This figure rises to 38% for those with household incomes under £30,000. Thirty-eight percent of all over 55s have never sought advice about retirement options. When asked why, 31% said they are confident in planning their own affairs. Just over a tenth (12%) say they don’t want to discuss their financial affairs with anyone because they’re private. The research also found that those with incomes under £30,000 are much less likely to seek advice than their wealthier counterparts.
The research also highlights some worrying knowledge gaps when it comes to retirement. Two fifths of those surveyed (41%) said that they aren’t aware of the different options and products available to them. Almost half of over 55s (44%) believe they don’t need an IFA, while 36% say they don’t know what one is.
Andrew Tully, Pensions Technical Director at MGM Advantage, commented on the findings:
“The guidance guarantee is a crucial piece of the Budget jigsaw. Just as your choices at retirement increase, so those decisions become more complex. Given the need for proper financial advice is even more important after the Budget proposals, it is extremely concerning that so many people do not value it and believe they are able to make decisions about how to best finance their retirement by themselves. If people do not seek expert help when considering their options for retirement, we could see many people making poor choices, such as paying too much tax, or investing in poor value solutions.
“We need to think about the lessons learnt from auto-enrolment, as there we have a form of soft compulsion to save. Perhaps similar prompts to use the guidance service should be considered, to ensure most people have a basic level of understanding of the myriad of options which are likely to become available before making any decisions.”