Survey finds 'worryingly low' use of retirement advice

Only around one third (32%) of people over 55 who have accessed their pension are using a financial adviser for help with financial planning, according to new research from Canada Life.

The pensions, investment and insurance company said the survey pointed to "worryingly low" advice uptake among people making important pension decisions.

Pension freedoms introduced in the 2015/16 tax year mean that anyone aged 55 and over can access all of their pension savings and do whatever they like with them, rather than having to buy an annuity.

The biggest reason given for not using an adviser was confidence in knowing what they were doing (44%), with men (53%) feeling more confident in making financial decisions without an adviser than women (31%).

One in four (26%) respondents said they didn't think their pension pot was big enough to warrant financial advice, while 22% said they were put off by the cost of advice.

Trust was another barrier, with one in five people (20%) not seeking advice due to trust issues.

The research also revealed that those who use a financial adviser are twice as likely to withdraw a cash lump sum and buy an annuity with the balance of their pension compared with those who didn't get advice -- 37% vs. 18%.

Commenting on the findings, Andrew Tully, technical director at Canada Life, said: "A significant majority of people exercising their pension freedoms have turned their back on financial advice. We've exposed some pretty entrenched views on the value of financial advice, but many people are seemingly making complex decisions and potentially irreversible financial decisions unaided.

"I'd like to turn the debate on its head. Rather than talk about the cost of advice, we should instead promote the idea that people can't afford not to get advice. It can often be just as cost effective, or even better value paying for advice, than not.

"Advice is much more likely to create better consumer outcomes than trying to go it alone with a DIY retirement."