Amid sweeping changes to pension freedoms, thousands of savers are ignoring professional financial advice, despite 80% admitting their own financial knowledge is insufficient.
New freedoms introduced on 6th April mean savers can now access their full retirement fund from the age of 55, leading to a surge of savers seeking professional financial advice.
However, our latest Tackling the Savings Gap research found that, of those who are seeking financial advice, almost 50% ignore the advice they are given. Yet, when asked to rate their own financial understanding, less than 20% of Britons claim to have a good grasp.
Our independent survey of over 2,000 people, also found that 46% of those aged 35 -44 have ignored financial advice, rising to 51% among 45-55s, with 44% believing the advice they were given was wrong and 22% receiving contradictory advice.
In an effort to address the growing Advice Gap, the government has now launched the Financial Advice Market Review to explore how technology can be used to make financial advice more accessible.
Our Managing Partner, David Harrison, said: “No one expects consumers to be experts in financial services – that’s the role of the adviser. It is alarming to see such high proportions of people opting to ignore the advice they are given.
We fully support the Financial Advice Market Review as we’ve long said that technology is the key to making advice widely accessible. We’d also like the FCA to consider regulating products, not advisers, as that will help to simplify the industry and make client’s decision-making easier.
The best way to do this is through a combination of personal finance education and technology that puts power into the palm of savers and investors.”
To help Britons improve their financial knowledge, the True Potential Centre for the Public Understanding of Finance has launched two free online personal finance courses, Managing My Money and Managing My Investments. So far, these courses have helped over 65,000 people take control of their finances.