Consumers 'overwhelmed' by pensions information

Many people feel 'in the dark' when it comes to pension saving, new research suggests.

A survey of 6,000 UK adults by Standard Life has revealed that half (50%) think information around pensions and retirement is overwhelming, and more than two in five (41%) admit they have no idea what to do next with the pensions information they have.

Worryingly, 72% of the respondents said they are doing little, if anything, to plan for their retirement.

But a growing number of people have a positive view of the help offered by third parties: over four-fifths (83%) now think financial advisers are a useful source of support, rising from 73% last year. Similarly, 76% say that speaking with their pension provider or reading information on their pension provider's website has been helpful (increasing from 70% and 71% respectively).

Increased demand for retirement advice

Separate research by Aegon suggests that demand for retirement advice is on the increase.

Advisers estimate that well over half (58%) of the assets they advise on are for clients receiving retirement advice, up from 55% a year ago. And three quarters (75%) of clients surveyed for the report said that the economic situation of the past year has led them to consider changing their level of risk, the income they take, or review how much and/or when they pass on money.

"The research shows that the cost-of-living crisis plays a huge part in client demand for retirement advice, which is perhaps not too surprising considering volatile markets, rising interest rates and high inflation will naturally impact financial plans," said Ronnie Taylor, chief distribution officer at Aegon.

"With many advised clients admitting they plan on reviewing how they manage their money, the findings highlight the value of getting professional advice. This can offer invaluable support in making good financial decisions in volatile times and in planning for retirement."

'Advice gap' remains

There are still many more people who could benefit from financial advice, however.

Recent research from the Financial Services Compensation Scheme (FSCS) shows that almost two-thirds (64%) of UK adults with savings, investments or a mortgage have not sought regulated financial advice in the last five years.

More than half (55%) of those with any financial products think that paying for financial advice is for the wealthy.

Not seeking regulated advice, or following guidance from unregulated and unsuitable sources, could put UK adults at higher risk of putting their money somewhere that isn't safe, FSCS warned. It's important to remember that consumers may only be eligible for compensation for poor financial advice if they are dealing with a firm that is authorised by the FCA.

Encouragingly, however, the findings also show that among those who have taken paid-for regulated financial advice, 62% said that if they needed financial advice for a similar reason, they would use the same service from the provider they used before.