A growing proportion of pension savers are taking no advice or guidance at all before accessing their retirement savings, according to new research.
Pension freedoms were introduced a decade ago. But according to a YouGov survey of over 2,000 adults aged over 55 - commissioned by the Institute and Faculty of Actuaries (IFoA) - 43% of respondents took no advice or guidance when getting to grips with and accessing their pension savings. This figure has risen from 40% in 2022.
The IFoA has published an updated study of public attitudes to pension freedoms. The new study also reveals a fall in the proportion of respondents who have used government guidance such as Pension Wise, which has dropped to 20% from 22%.
When asked why they hadn’t sought any guidance or advice, 56% said that they felt that they didn’t need it, up from 51% in 2022. A further 14% took advice from friends and family, up from 10% three years ago.
The findings confirm previous research by Royal London, which last month revealed that 18% of savers eligible to make a withdrawal surveyed by the firm used pension freedoms without taking any form of advice.
“This research paints a familiar picture,” said Alyshia Harrington-Clark, head of strategic policy at the Pensions and Lifetime Savings Association.
Increasing retirement worries
The IFoA study also revealed an increase in retirement worries and a lack of understanding among consumers.
Almost a quarter (24%) of respondents said they were worried about making the wrong decision and running out of money, up from 22% in 2022. In addition, 15% said they did not completely understand their options, up from 11% in the previous study.
Meanwhile, 11% of respondents did not understand pension products and charges, up from 7% in 2022.
“The results we have seen in this survey point to the need to re-examine how pension savers are supported to secure a good standard of living in retirement,” said IFoA president Kartina Tahir Thomson.
“We have previously commented that many are not saving enough for their retirement. It is concerning that, even where individuals have saved enough, lack of guidance and limited understanding could lead to poor investment choices, meaning they still struggle in retirement,” Thomson continued.
“The government must now use the opportunity of phase two of the pensions review and the upcoming Pensions Schemes Bill to deal with these worrying trends in decision making and pension saving.”
