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04 Mar 2015

Experts Urging Retirees To Seek Paid Financial Advice On Pensions

A new survey has revealed that just one-in-five British citizens aged 45-65 have sought paid financial advice about their pensions, This Is Money reports.

With wide-scale pension reforms due to come into force only next month, those in the industry argue that these findings show people are not properly equipped to navigate the system - and they are warning savers to pay financial advisers for help, or risk wasting their pension pots.

The report, conducted by Old Mutual Wealth, rather worryingly found that some 35% of respondents have never sought any advice about what to do with their pensions - not even from friends or relatives.

Meanwhile, 17% of those approaching retirement had gone to a pension provider for help, and the same number had carried out their own online research. Some 16% had asked friends or loved ones for advice, while at the lower end of the spectrum, 5% had got their information from reading the newspaper and 2% from talking to banks.

Old Wealth´s chief executive Paul Feeney stated: “The new pension freedoms are great news because they give people control […] but they could be a disaster without financial advice.

He added that “with greater freedom comes greater responsibility, and the Government has placed the responsibility for a secure and prosperous retirement firmly on to the individual.” This will mean that demand for professional financial advice is likely to increase under the new reforms, he predicts.

As of April this year, retirees will also have the option to access free guidance from the Government´s new Pension Wise initiative. Guidance sessions offering general help will take place online and over the phone, as well as in person at Citizens Advice Bureau offices.

The study by Old Mutual revealed that awareness of this service was high, with 40% of respondents already knowing about Pension Wise.

Michelle Cracknell, from The Pensions Advisory Service, explained that guidance - as opposed to specific financial advice - would “help people understand their options, and as a result, some may choose to take advice as they will understand the importance of the decisions that they will be making.”

Copyright M2 Bespoke 2015

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