The Pensions Advisory Service (TPAS) has found that most people who contact them have no idea how their retirement income will be provided (Pension Advice Clifton).
Analysis of £1,500 enquirers to The Pension Advisory Service from April 2015 to February 2016 found 73 per cent thought the state pension would enable them to live comfortably in retirement, while one in five cited the state pension as their main source of income.
Three out of 10 people who approached The Pension Advisory Service admitted they did not know how much state pension they would obtain, while 31 per cent said they would not know how to acquire an estimate for this.
The Pension Advisory Service also stated there had been a 71 per cent increase in people seeking guidance since the introduction of the pension freedoms a year ago, and in the last year it had dealt with more than 180,000 enquirers.
The most likely trigger prompting people to make an inquiry was reaching the point of retirement or beginning to receive pension payments, according to analysis of The Pension Advisory Service data.
The average age of those making enquirers is 59, with two thirds made by those over 55, indicating that many consumers are still waiting until they are very close to retirement before taking action.
Those aged under 40 accounted for just 8 per cent of enquirers, while men accounted for more than 60 per cent of all enquirers.
The statistics from The Pension Advisory Service come just days after the Financial Conduct Authority revealed HM Treasury is planning to cut funding for Pension Wise by 27 per cent.
Pension Wise’s budget as it exists will shrink by just over £10m, from £39.1m to £28.7m.
The funding cuts were made following a decision by the Government to merge the functions of Pension Wise with The Pension Advisory Service, but also because Pension Wise spent £7.3m less in 2015/16 than was budgeted.
(FTadviser, April, 2016)
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About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.