Waste of money and intimidating: Why retirees shun pensions advice

Only one in five savers accessing pension freedoms are prepared to pay for advice, new research suggests.

A survey for comparison website money.co.uk of 669 people aged over 55 found that common reasons for spurning advice included not feeling advice was needed, not being able to afford it and feeling intimidated by advisers.

Of the majority of respondents who said they would not pay for advice, just 20 per cent said they would go to the Pension Wise guidance service instead.

The research found 59 per cent of those polled said they did not need advice, while 28 per cent branded advice a waste of money and 27 per cent said they could not afford to see an adviser.

Some 15 per cent of respondents said they wanted quick access to their money, so they did not want the “hassle” of seeing an adviser.

Of the women asked, one in 10 said they felt intimidated about using an adviser.

The research also suggests although savers do not want to seek advice, only 38 per cent say they fully understand the tax implications of pension pot withdrawals.

For those willing to pay for advice, retirees put the amount they would be prepared to pay at £253 on average.

Money.co.uk editor in chief Hannah Maundrell says: “Given consumers stand to lose a fair whack of their retirement savings to the taxman if they get things wrong, getting help from a decent financial adviser is likely to be worthwhile.

“Our concern is people will rush into a decision without fully researching the long-term impact or costings, simply because they need cash fast.”

The Government is carrying out a wide-ranging review into the advice market, looking into affordability issues and the availability of advice. Final proposals are expected ahead of the 2016 Budget.