Just 14% taking regulated advice before retiring

Just 10% of retired and semi-retired people aged 55+ saw their own financial adviser, 4% saw an adviser arranged by their employer and 4% used the Pension Wise guidance service. Among the 55-64 age group, 9% used Pension Wise, still far below the government’s stated ambition to make it ‘the norm’.

The majority of people take the DIY approach or do no planning at all. 40% said they conducted their own review of their personal finances to assess their income and outgoings in retirement, a figure that was nearly twice as high among men (51%) than women (27%).

30% of people said they didn’t do any financial assessments, they just retired, but this rose to half (51%) of those who retired when they started to receive State Pension. And one in eight (13%) said they had no time to plan because they were forced to retire.

The research shows that younger retirees were more likely to have planned their exits from work than older age groups. Among those aged 55-64, 18% saw a financial adviser and 51% conducted their own financial review. That compares to the 65-74 age group where one-third fewer (12%) saw an adviser and 41% conducted their own review. Double the number of people aged 65-74 said they did not review their finances (31%) compared to those aged 55-64 (15%).

Stephen Lowe, group communications director at Just Group, said: “Stopping full-time work is a huge financial step and involves complex choices. Yet most people take a DIY approach and go it alone rather than engaging professional help.

“While not everybody will have access to an adviser or will want to pay for regulated advice, that doesn’t explain the very low number benefitting from the free guidance from Pension Wise which is available to all those aged 50+ with a defined contribution pension.

“State Pension Age still remains a key anchor point for giving up work. While early retirees are more likely to have made financial plans, those retiring at State Pension age are more likely to say they didn’t plan, they just retired.

“About one in eight (13%) said they had no time to plan because they were forced to retire which seems level across the age groups. However, there is a gender split with just 10% of men saying they were forced to retire compared to 17% of women.

“Our research shows that if a Pension Wise appointment was automatically booked, only 1-in-25 (4%) of those aged 45+ with a DC pension would opt out.

“There is support from the industry, charities, Money and Pension Service and consumer groups for a pilot scheme to test the effectiveness of automatic booking which we believe offers the best measure strong enough to achieve the government’s objective of making Pension Wise use the ‘norm’ among people needing to make the best of their pension savings.”