New research from unbiased.co.uk and Prudential reveals that 20 per cent* of the nation is now more confused by their retirement options following the changes.
This clearly creates a fantastic opportunity for advisers. And despite the government promise to offer ‘free guidance’, this is not advice and is something both unbiased.co.uk is keen to make clear to consumers.
It is important for consumers to understand that advice costs money and that they shouldn’t simply ‘shop around for the cheapest adviser’, it is about finding the right adviser for their needs and at the appropriate cost.
We need to empower consumers to ask the right questions and become engaged in their retirement. For that purpose unbiased.co.uk and Prudential have joined forces to create a pre-retirement checklist. This checklist clearly explains what consumers should be thinking about depending on where they are in the retirement process: 10 years, 3-5 year or 6 months. It also offers useful actions points, tips and crucial questions they should ask you and your colleagues.
We hope that these changes will invigorate the accumulation market and hopefully ignite interest in this desperately important subject: financial security in retirement.
But with greater accessibility to advisers, greater care is needed to ensure savings generate a sustainable income into a potentially long retirement. Therefore, more decisions are needed and we see this driving an even greater demand for professional advice, especially as we all know that every individual and their needs are different.
Vince Smith-Hughes, head of business development at Prudential explains the opportunities for advisers are also clear – to help your clients realise the potential these changes bring, to review earlier recommendations and to make more potential customers become lifelong, satisfied clients. “In terms of product recommendations, the existing solutions – annuities and pension drawdown – still remain your essential tools. It’s possible a more blended approach combining phasing of benefits, annuity, drawdown and cash lump sums with good tax planning may become more mainstream.
“So, like unbiased.co.uk, Prudential is fully supportive of the need to drive people to financial advice and make the most of this important evolution of retirement planning. Hopefully the new pre-retirement checklist will encourage people to seek financial advice. It can help them consider what the changes might mean to them and to explore the opportunities further with a professional adviser.”
*Research carried out by Opinium Research on behalf of unbiased.co.uk and Prudential 1-4 April 2014 among 2,003 nationally representative UK adults aged 18+