Prudential is released a new survey that reveals only two out every five people are planning their own personal retirement for the year 2011 even though most have not sought out advice from a professional or have followed the advice of a non-professional.
This means two out of every five people that will retire this year will not have any professional advice backing their financial resources for retirement. The Class of 2011 research from Prudential took a close look at the plans of retirees this year and discovered that 43% of them did not receive professional advice or chose to look towards the media or internet for advice on how to plan their pensions.
Despite the results, the research also found that about 28% of those who will retire this year did look to an IFA for advice, which is roughly the same figure of those who did in 2010 as well. The study went on to display the fact that people are now more likely to conduct their own personal research before they seek out financial advice from a professional. Half of the people who used an IFA stated that they also choose to look at media sources and research online as well which is an increase over the one in three who looked both online and to an IFA for retirement advice
Prudential also found that nearly one in ten (9 per cent) are relying on employers for pre-retirement financial advice advice while another 16 per cent are putting their faith in a mix of friends and family, pension providers and banks.
Russell Warwick, distribution strategy director at Prudential, said: “These results show that there is a genuine advice gap for people in the run-up to retirement. The majority of people due to retire this year will miss out on professional advice and could potentially be making mistakes when planning for their retirement income.
“It is imperative for people looking to secure their retirement income to start saving as much as they can as early as they can and in the years immediately prior to retirement I would also recommend a consultation with a professional adviser on an annual basis.
“Our research has also found that the numbers seeking financial advice prior to retirement in 2011 have not changed since last year. This highlights the work that we as an industry will need to undertake to increase consumer understanding of the value that advisers can add in the run up to the implementation of the Retail Distribution Review next year.”
According to Prudential’s research, men are more likely to seek financial advice than women in the run up to retirement. Around 34 per cent of men intending to retire this year cited IFAs as their main source of advice, compared with 24 per cent of women.
People in Yorkshire & Humberside (34 per cent) and Londoners (32 per cent) are the most likely to have received the majority of their retirement advice advice from a professional adviser.