Just one in five over-55s are willing to pay for regulated financial advice, with the figure dropping to just 13% of men in that age bracket, a survey has found.
The survey, by comparison website Money, found the majority of people approaching retirement age will not seek financial advice despite over 55s being handed complete access to their defined contribution pension pots under freedom and choice, introduced in April this year.
The survey found a quarter of over 55s with a pension planned to make a withdrawal following the introduction of pension freedoms in April this year. When asked why they wouldn’t pay for a financial adviser, they vast majority – 59% – said they don’t feel they need it.
More worryingly for the financial advice sector, 28% shunned it because they think advice is a waste of money, and one in ten women said they feel intimated by advisers.
Just over a quarter – 27% – said they felt they couldn’t afford financial advice, and 15% said they want their money quickly without any hassle.
Just one in five said they will take the free 30 minute session provided by Pension Wise and cite it as a reason for not paying for the service of an IFA.
Of those that are planning to pay for advice, the majority – 82% – said they are doing so as they want to get such a major financial decision right.
However, when it comes to cost, consumers would be willing to pay an average of just £253 for financial advice – more than half said they wanted to pay £200 or less.
The average cost of an initial financial review is almost double this at around £500, according to Money.
Despite their reluctance to pay for financial advice, only one in three of those over-55s planning to make a withdrawal from their pension pot admit they fully understand the tax implications of doing so, according to the survey, which could lead to a huge financial loss for some.
The research was carried out from the 26 to 29 June 2015 among 669 over 55 year olds with a pension.