Scottish Widows
- https://www.scottishwidows.co.uk/about-us/media-centre/reports.html
- growing polarisation in pensions - haves and have nots, and the will haves and the will not haves
- only 42% believe they have the headroom to save for retirement
- people 6-64 only 30% have taken financial advice (33% too expensive)
Quotes
Beyond those that cannot save more we see continuing evidence that people are struggling to navigate their choices. Many don’t know how much to save or what their options are, while there are those who may benefit from more formal support through financial advice who are intimidated or unsure how to go about it.
The National Retirement Forecast is based on the principle that retirement preparations depend not just on pensions but on the wider financial picture of households: savings and other investments, housing and its role for some as an expenditure item and for others as an asset, and inheritance.
New tools which allow us to have more personalised and directive guidance conversations with customers are needed, and technology should be utilised to greatly reduce the cost of providing a full advice service to those with less assets, to the point that there is no need for an additional charge to be presented to the customer at the point this support is required.
The system is too complex – genuine simplification so that everyone can plan and save for retirement without needing an actuary, lawyer and investment manager is much needed.
Worryingly, half (50%) of people in their 50s and early 60s have still done little to no research on how much they might need to save for retirement.
People want experts to tell them what to do, but at present that service is only available from professional Independent Financial Advisers, and due to the cost of that support, it’s only accessible and worthwhile for people with over £200k in assets.
At present, the 80% of the population who cannot afford those professional services rely on information from a range of sources to try to make the best decisions they can. These decisions and choices can be sub-optimal and the process can place a strain on mental wellbeing. We have welcomed a recent discussion paper published by the FCA, which explores ways in which this ‘advice gap’ could be closed. We are supportive of new tools which have been proposed which could point pension savers more specifically to the best way forward, without this being termed ‘Regulated Financial Advice’ and coming at a cost.