Are you confident in being able to afford the retirement you want? Unfortunately, few people think they're on track to achieving their ambitions – and most aren't willing to pay for advice that could hep them get closer to their goal.
The research, from Aegon UK, found that just 14% of people are confident that they can plan their retirement goals and invest to achieve the retirement they want, with a minority being confident in taking a DIY approach. Just 23% said they would be happy selecting a pension product themselves, and only 20% feel confident that they know how to access their pensions at retirement, which could suggest that information surrounding the recent pension freedoms hasn't registered with a large number of people.
Despite this lack of preparation – and in many cases, a lack of knowledge – an overwhelming 78% hadn't sought financial advice specifically about their pension provision, with 73% saying that the prospect of having to pay for it puts them off seeking help. However, this could be a false economy, as among the 46% who have sought advice, 90% said that the service was good or that they were satisfied, indicating that it could be value for money after all.
The fact that many people are happy to buy non-investment financial services products without advice perhaps highlights the need for advice when it comes to pensions. For example, 63% of respondents have a high degree of confidence when it comes to choosing a savings account, while three-fifths are just as happy to choose car insurance (60%) and home insurance (58%).
However, pensions aren't in the same vein. They may still take a place under the financial services umbrella, but pensions as a whole are a lot more complex than their non-investment counterparts – they're still investments and can be complicated as a result, but other financial matters still seem to take priority.
People are far more willing to take advice regarding stock market investments (27%), for example, when deciding how best to mitigate inheritance tax (27%) or when choosing a mortgage (26%). Conversely, a relatively small number seek advice when it comes to planning their pension goals (22%), consolidating their pension pots (22%) or selecting a pension product (21%), which suggests a clear need to better communicate the value of advice in this area.
Duncan Jarrett of Aegon said that the issue was particularly pressing following the pension freedoms, which have "introduced much greater flexibility but also a range of more complex choices at and through retirement… the scale of the mountain the industry and Government has to climb when trying to bridge the advice gap is clear".
There's a particular disparity between financial products that can be easily identified on price comparison sites, with the majority of people being happy to make decisions when they can compare simple features and costs. However, the difference when it comes to pension and investment decisions is marked, said Duncan: "Only a minority are confident of a DIY approach, yet only small numbers are willing to ask for help. This is despite the fact that 90% of people who have taken advice were happy with the service, which suggests it is the cost, rather than the service itself, which is the biggest barrier."
He calls for a "concerted effort" from the industry to explain the value of advice to consumers, but there's no need to hang around – if you want to be confident in meeting your retirement goals you may want to consider seeking suitable advice, even if it means paying for it, as that way you may come closer to living the retirement you want.
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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