For many savers, nothing is more important than ensuring financial security during their golden years. Independent financial advisors have made this happen on countless occasions, yet it’s never been easy for the industry to put a value on this.
We joined with unbiased.co.uk to try to change this, using a survey of UK consumers (both advised and non-advised) to see whether seeking financial advice offers value for money. The differences we found were vast: for the average UK saver over 40, savings levels increase by £98 per month as a direct result of taking professional advice. That adds up to over £1000 extra for every year of saving. This is a large sum for any saver, but few know that seeking the support of an adviser can help to deliver this. This needs to change, and it is up to advisers to go out there, show their worth and make it happen.
The findings also make clear the value that advisers add in the long term: nearly three quarters (71%) of UK savers who first sought advice in their late teens/early twenties (18-24 years old) now feel well prepared for retirement. That proportion decreases the longer savers stay unadvised, falling to 39% of savers feeling well prepared when first seeking advice between 45 and 50. Clearly, those who seek advice earlier on in life are better off than those who leave it late. Putting this simply, the earlier a saver receives advice the better prepared they are for retirement.
This finding is particularly important given the Guidance Guarantee introduced in the 2014 Budget, allowing for the provision of one session of guidance at retirement. This is certainly a start, but our findings suggest what advisers already know: waiting until retirement to sit down and discuss options is far too late. We believe that this needs to happen at least ten to fifteen years before retirement: this is a huge opportunity for the advice community, but they must take the lead by stepping in to help savers make the best decisions they can to try to boost the level of retirement income they receive.
Aside from the monetary uplift, financial advice provides softer benefits too. Confidence about a saver’s position going into retirement can make all the difference, and we’ve found that people who have taken advice have this in abundance. More than half (54%) of those who have sought advice on their retirement planning feel well prepared when considering how much money they have saved for the future, compared with only 14% of people who haven’t consulted an adviser. This is a huge endorsement of the added value advisers can bring, yet it remains unknown to many consumers.
The decisions savers make about retirement are some of the most important they will make in their life. This research shows that advisers can be the difference, so we hope they take it on board and use it to show people the value for money they can offer.
Sample size consists of 213 UK savers aged 40 and over who have sought advice on their retirement planning, taken from an overall sample of 1,486 pre-retirees. Research conducted by Opinium Research in July 2014.
Sample size consists of 1,486 pre-retirees, of which 444 have sought advice on their retirement planning and 997 have not sought advice. Research conducted by Opinium Research in July.