Consumers who use a financial adviser expect to retire earlier and with a bigger pension pot according to new research from Standard Life.
Its survey found that consumers who seek advice expect to retire aged 66. In contrast those not receiving financial advice are not expecting to retire until they are 69. In addition, advised consumers believe they will be able fund their retirement lifestyle for 23 years – six years more than non-advised clients.
Standard Life’s Retirement Voice study highlights the beneficial impact financial advice can have on retirement preparation. Those speaking to an adviser are twice as likely to write a detailed spending plan than non advised consumers.
The research also indicates the benefits of financial planning for those in retirement. Almost all (96 per cent) of retirees who did either a great deal of financial planning or just a little financial planning (82 per cent) say they are enjoying their retirement. However, this drops to 72 per cent among those who have done no financial planning.
In addition regrets among non-advised retirees are more pronounced, with 23 per cent those without an adviser stating they need more money in retirement than they originally anticipated, compared to just 19 per cent of advised customers. A total of 23 per cent of non-advised customers said they now wished that they had planned for retirement more thoroughly, compared to just 14 per cent of advised customers.
The value of advice holds true regardless of household income – 23 per cent of wealthier pensioners, with an income of between £40,000 and £49,999, said they wished they had planned more thoroughly.
Standard Life retail advised managing director Chris Hudson says: “Planning your finances for retirement is daunting, and can throw up a lot of considerations, so it’s no surprise that people who receive financial advice feel better prepared for the future.
“There’s a clear difference between the retirement plans and experiences of those who have access to advice and those that don’t, highlighting the current advice and guidance gap in the UK.
“Our research shows the value of financial advice. It not only positively influences the age at which someone retires, but also whether they enjoy their retirement too.
“However, financial advice remains inaccessible to many, who either can’t afford it or don’t know where to get the support they need, while the existing system doesn’t allow providers to give personalised guidance that considers individual wants and needs.
“With the financial regulator (FCA) recognising the issues and holding a consultation into broadening access to financial advice, we’d like to see an environment where consistent, high quality and accessible guidance and advice is made available for all.”
