This could increase your monthly pension by as much as £2321.
The figures, which form part of unbiased.co.uk and Standard Life's Value of Advice campaign, compare the differences in pension savings and contributions between consumers who have taken independent financial advice on their retirement provision and those who haven't. The report2 shows the current average pension pot for consumers who have been advised on their retirement planning is £74,554.30, double that of those not seeking advice (£37,277.10). Again, those who have taken advice put nearly a third more a month (£167 v £108) into their pension plan. Those who haven't taken advice think that people should be putting away, on average, 9% of their total salary, compared to the advised group who think people should be aiming for 11.4%.
Based on a 54-year old (the average age of pension savers surveyed), this could mean the difference between getting a £493 a month retirement income (based on the advised figure) versus £261 a month (non-advised).
Karen Barrett, Chief Executive of unbiased.co.uk, comments:
"It's vital to get the message across to consumers that when they are planning their finances, taking independent financial advice is something almost everyone should consider. For the majority, independent financial advice is within their means and can provide peace of mind. Our joint report shows that those who have taken advice are far better positioned right now for retirement than those who haven't. Consumers are currently faced with delayed retirement ages and rising life expectancies - we are an aging population and we need to be putting the right preparations in place for this."
The Value of Advice campaign aims to demonstrate the long-term value to consumers of seeking independent financial advice. The results compare the differences between those who have sought advice from an IFA on financial products and those who have not, exploring the financial circumstances and attitudes of consumers towards their finances. In order to produce comparable results, the research has been based on consumers with an average gross household income of £15,000 or more.
Karen Barrett comments:
"We believe that there is a strong need and a great opportunity for a targeted consumer awareness campaign clearly spelling out why advice is important and what exactly an independent financial adviser adds to the process of financial planning.
"In the lead up to the implementation of the Retail Distribution Review, we are seeing greater emphasis placed on the advice process and the value it adds - but while the advice industry is undergoing numerous changes the RDR ‘tag' bears no meaning to consumers. I'd like to thank Standard Life for also recognising that a campaign such as the ‘Value of Advice' was needed in order to make consumers aware.
"It's our aim to tackle the misconception that financial advice is free, it has never been free and like other forms of professional advice (solicitor, accountant) we need to clearly demonstrate that the service IFAs provide comes at a cost but, as our research shows, one that is well worth paying for."
Dave McGovern, Head of Retail Marketing at Standard Life, commented:
"Like most things in life, when you're tackling something complex or have difficult questions you'll probably turn to a professional. For many people, decisions about their money fall into this ‘complex' category. For this reason, more and more people are investing in professional financial advice.
"A good adviser will quickly understand your financial position and help you identify your goals. They'll look at the lifestyle you have today and the one you want in the future. They'll understand how you want to invest and what your financial - and life - priorities are. With this insight they'll prepare a financial plan that's unique to you, and more importantly, a plan that will adapt as your needs change. In short, they'll make dealing with your finances easier, giving you greater confidence and certainty over your long-term plans. Good financial advice is something we are passionate about at Standard Life and that's why we're working closely with unbiased.co.uk to help promote its value to the consumer."
