33% would not value retirement advice

A third (33%) of respondents aged 55 or over who have not yet retired would not value financial advice when they retire, according to research by MGM Advantage.

Tully-Andrew-MGMAdvantage-2014

Its research, which surveyed more than 2,000 UK adults aged 55 or over, found that 38% of respondents have never sought advice about retirement finance options.

Of these, just under a third (31%) said they are confident enough to plan their own retirement, while 12% do not want to talk to anyone else because their financial affairs are private.

The research also found that 41% said they are not aware of the different products and options available to them to generate retirement income. This rises to 45% of respondents with household incomes of less than £30,000, and almost half (48%) of women.

A fifth (20%) of respondents would use internet websites for advice about at-retirement options, while 18% would use a pension provider and 25% would use an independent financial adviser.

Men are more likely than women to use the internet (24% compared to 17%), while women are more likely to ask family (22% compared to 13% for men).

Andrew Tully (pictured), pensions technical director at MGM Advantage, said: “The guidance guarantee is a crucial piece of the Budget jigsaw. Just as 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 options which are likely to become available before making any decisions.”