Should retirement advice be compulsory? According to research from MGM Advantage, a large proportion of older workers think that this should be the case, and they're calling on the regulators to make that happen.
Their survey found that 65% of non-retirees aged 55+ think it should be compulsory to receive financial advice at retirement, something that could have a huge impact on the amount of income eventually received. Furthermore, 62% who are planning to use their pension funds prior to retiring also believe that advice should be compulsory, which would ensure that no-one would be able access their pension pot without receiving regulated advice.
This could arguably be the right move, as the figures reveal that 35% of respondents admit that they wouldn't be comfortable managing their own pension in retirement, with just 11% saying that they'd be very comfortable doing so. This suggests that many people will require ongoing advice throughout retirement, and as a result, the provider is calling for a clear hand-off to regulated financial advice when people start to consider leaving work.
"The research paints a clear picture of an appetite among the over-55s for financial advice not only at the point of retiring, but also during retirement," said Andrew Tully of MGM Advantage. "People are making difficult, life-changing decisions, made all the more complex by the new pension rules. We're seeing the majority of people recognise that without financial advice they may fail to realise the full implications and make decisions that end up costing them dearly.
"The Pension Wise guidance service is a good starting point [as it] can help people understand the options available, but it may not be enough to help them make the choice that's right for their personal circumstances. We need to provide a clear hand-off to regulated financial advice to help people take the next logical steps. This is the only way we can remove the status quo, ensure we improve the outcomes for people at-retirement and make sure the new rules benefit as many of them as possible."
So, what should you do to ensure you make the right at-retirement decisions? Seeking advice may not yet be compulsory, but it still makes sense to do so. This is the only way you can be sure you're left with the retirement solution that's right for you, and although heading to Pension Wise will be a great first step, it shouldn't be the end of the journey.
Ideally, seek out independent financial advisers who can help you decide the best course of action, and at the very least you should head to the open market to compare annuity rates to get an idea of the income you could receive should you go down this route. Above all, take your time – there's no rush to make your decision, and if you go through the process carefully, you can be sure you're choosing wisely.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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