Wealth of Advice, Swale House, Mandale Business Park, Durham, DH1 1TH
Over a fifth (22%) of clients come to financial advisers too late for effective retirement planning, as the benefits of taking early advice “cannot be overstated”.
This is according to Invesco’s UK retirement study, which also found that 64% of advisers said people who seek advice during accumulation have a better understanding of pension options than those who only take advice at retirement.
Additionally, 79% of advisers said running out of money during retirement is a top client fear.
The study stated that defined contribution (DC) savers now represent the dominant source of retirement income.
The fear of the unknown is preventing retirees from spending, with advisers saying the top concerns are health costs (35%), worry about seeing their savings post diminish (32%) and a desire to leave an inheritance (28%).
Additionally, over half (51%) of advisers are not satisfied with current retirement products and 75% are calling for product innovation to help meet the evolving needs of DC retirees.
Also, more than a quarter (29%) of non-advised retirees do not actively seek any retirement information.
Pensions Freedoms that were introduced in 2015 offer flexibility and choice, “but navigating this without expert knowledge or guidance can be incredibly difficult”.
Advisers have said there are three major misconceptions among their clients. The first is underestimating how much they need to save (51%), secondly understanding their life expectancy (47%) and finally miscalculating likely retirement spending (46%).
Invesco’s said these misconceptions are often the result of low pension engagement throughout accumulation.
• Wealth of Advice can help you make sure you get the retirement that you want. We offer a wide range of impartial advice, always tailored to the individual client’s needs and circumstances. For a free copy of our guide Understanding Your Retirement Options, visit https://www.wealthofadvice.co.uk/financial-guides/retirement-options-guide Alternatively, contact us for a free, no-obligation consultation. Tel. 0191 384 1008 or email enquiries@wealthofadvice.co.uk
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