More than two in five or 41 per cent of UK customers say they are unsure of what to do next after getting information about pensions and retirement because they find it to be overwhelming, according to Standard Life.
According to Standard Life’s Retirement Voice study, households have been negatively impacted by high inflation, rising interest rates, and volatile markets during the previous 12 months. Consumer confidence and self-belief have suffered as a result; currently, only 59 per cent of consumers feel competent in making financial decisions, down from 63 per cent in 2022.
Over four-fifths or 83 per cent of individuals now consider financial advisers to be a valuable source of assistance, up from 73 per cent last year. This is probably due to the fact that more people are seeing third-party support as useful.
Likewise, 76 per cent say that speaking with their pension provider or finding information on their pension provider’s website has been helpful (up from 70 per cent and 71 per cent, respectively), while 72 per cent say that reading pension provider literature has been helpful (up from 65 per cent), and 69 per cent believe this about their employer (up from 62 per cent).
Two out of five people or 41 per cent say they look at their pension provider’s website at least once a year when seeking advice on pensions and retirement planning. This is followed by friends and family (39 per cent) and internet guidance sites (39 per cent). The two groups that people with workplace pensions are most likely to turn to for advice are their employer (33 per cent) and coworkers (29 per cent).
The research found that 93 per cent of planners on lower salaries (less than £20k) would say they are enjoying their retirement, compared to 66 per cent of non-planners on lower incomes. This shows that taking control of your money, with or without the assistance of a third party, pays off. But 72 per cent of all respondents claimed they aren’t doing much at all to prepare for retirement. Without a doubt, more have to be done to guarantee that individuals feel able to access the assistance they require to manage their long-term savings.
Standard Life managing director for customer savings and investments Jenny Holt says: “People are looking to trusted professionals for help in uncertain times and this has once again highlighted the value of having access to advice when making financial decisions, but it’s also thrown a spotlight on the current advice and guidance gap in the UK.
“The benefits of planning for the future and getting the right support at the right time is clear, but currently financial advice can seem inaccessible, and the existing system doesn’t allow providers to give personalised guidance that considers individual wants and needs. The Financial Conduct Authority has opened a consultation into broadening access to financial advice, which is welcome, and we’d like to work with the government, regulator and our industry peers to create an environment where consistent, high quality and accessible guidance and advice can be provided.
“At the same time, we need to find new ways to get more people to actively engage with their pension savings and planning for the future. Making it easy for people to understand what they have, what it’s worth and what it might provide in retirement will be key to helping people make better financial decisions.
“It also needs to be easy for people to access the information and support that they need. For example, communications from employers around retirement savings that are regular, targeted and relevant is a great way to boost engagement and supporting employees with wider financial wellbeing can have a positive knock-on effect on preparedness for retirement.”