Steven Cameron, Pensions Director at Aegon UK, commenting on the new data published by the FCA said: "Looking at the statistics from a glass half full perspective, it's encouraging that almost two thirds of those using flexible access drawdown are seeking advice. Our recent research shows just how risky it can be to enter drawdown without advice, particularly when determining a sustainable income which will last a lifetime based on personal circumstances. However, the fact remains that a third of retirees are leaving themselves exposed to the risk of running out of money. More worryingly, it is much less common for those using the UPFLS route to seek advice. The considerations, when accessing a pension through UPLS, are identical to flexible access drawdown and more needs to be done to highlight the value advice can add."
Commenting on the retirement income data bulletin published by the FCA today, Stephen Lowe, group communications director at Just, said: “These figures show a failing in the system - not enough people are going through guidance or going on to receive full regulated advice. We don’t know whether customers who have withdrawn their savings are receiving good value from the subsequent investments they have been making as a consequence of this one-time decision. Behavioural economics shows that defaults work, seeing these figures it is getting harder to justify why Pension Wise is not the default option for all those looking to access their pensions benefits. If this money is ending up in the hands of scammers or inappropriate high-risk investments then the current approach will see many facing financial hardship later in their retirement.”
Philip Brown, Head of Policy, LV= said: Today’s figures published by the FCA highlight the worryingly low number of people taking advice and exercising choice at retirement. We believe that in order to get the most from their money, people should be encouraged to take financial advice and review their options for the best retirement solution. It's vital Government and industry work together to make sure we support consumers and signpost them to advice so they can make informed decisions at such an important time in their lives. We believe the creation of a new single financial guidance body is a good first step in tackling the issue of people retiring without support.”
The FCA Data Bulletin showing Latest Trends in the Retirement Income Market can be found here
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