Research from pensions and retirement specialist LV= highlights the benefits of taking financial advice for retirement planning.
The LV= Wealth and Wellbeing Monitor* reveals that much of the general population is confused and disengaged when it comes to retirement – but those who take financial advice are much more likely to be confident and better prepared.
Clive Bolton, Managing Director of Savings and Retirement at LV=, said: “The research highlights the enormous value and benefit financial advisers provide for their clients.”
The LV= Wealth and Wellbeing Monitor – a quarterly survey of 4,000 UK consumers – shows most people are not confident about their retirement plans:
• 59% of non-retired UK adults said they are not confident they have saved enough for retirement
• Two-thirds (66%) of non-retired women are not confident they have saved enough for retirement, compared to only half (50%) of non-retired men.
This lack of retirement confidence is a result of many not knowing how much they have saved in their pension, or how much they might need to retire.
• 30% of non-retired UK adults do not know when they are going to retire, while nearly one in four (23%) of those aged 55-64 do not know when they will retire
• Only 14% of non-retired UK adults have looked at their pension value in the last year and only 8% have researched how much they would need saved in their pension for a comfortable retirement
• But although so many people are not confident about their retirement prospects, only 7% have consulted a financial adviser about retirement.
Those who are confident about retirement are more likely to have consulted a financial adviser, increased pension contributions and discussed plans with their partner
• Two-thirds (65%) of non-retired people who have consulted a financial adviser are confident about their retirement plans vs. 41% of all non-retired UK adults.
• More than half (55%) have increased pension contributions and researched how much they need in retirement and 56% have discussed retirement plans with their partner
Mass affluent consumers are more engaged with retirement planning
The research highlights how mass affluent people – those with assets of between £100,000 and £500,000 excluding property – are more engaged with retirement planning. Mass affluent people are a core target market for financial advisers and the research reveals:
• A quarter of mass affluent adults (25%) are planning to retire before the state retirement age, compared to 12% of the general population
• Those approaching retirement (aged 55-64) are almost twice as likely (18%) as the general population of this age (10%) to have consulted a financial adviser
• Those approaching retirement (aged 55-64) are much more likely (36%) than the general population of this age (23%) to have looked at the value of their pensions
Clive Bolton, Managing Director of Savings and
Retirement at LV=, added:
“LV=’s Wealth and Wellbeing Monitor highlights how many people are understandably worried about the future in the current situation. However it’s striking to see how consulting a financial adviser makes them become much more confident about their finances and retirement plans.
“Saving some money in cash and keeping it aside for emergencies makes sense but too much money means people can miss returns from rising investment markets. A good financial adviser will help clients make the most of their savings by creating an investment portfolio to match their attitude to risk.
“Advisers have a vital role to play when it comes to long-term saving for retirement. There are so many variables for savers to consider: How much should I save? What assets I should invest in? What age should I retire? How much money should I draw from my pension? .
“Taking financial advice is a good way for people to find a way through the maze of retirement planning. A financial adviser will take stock of their client’s financial situation, make them think hard about the retirement they want and what they need to do to achieve it.
“LV=’s research indicates that those people who are confident about their retirement plans are much more likely to have consulted a financial adviser, discussed their retirement plans with their partner and increased their pension contributions.
“The cost of taking good financial advice represents is money well spent. Research** indicates that people who take financial advice are better off in retirement than those who don’t.”
Notes to editors
*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2020.
** International Longevity Centre