Retirement savers want the free pensions guidance promised by the Government to everyone retiring from April 2015 to be delivered face to face, a new survey by independent market research firm Consumer Intelligence shows.
Its nationwide study found 69% of retirement savers want their options explained in a formal session with a qualified adviser. Another 24% would be willing to use online services as long as there was human help available too. Just 3% would be willing to rely solely on online help.
On average retirement savers would be willing to travel 11.4 miles for face-to-face guidance with only 8% happy to travel more than 25 miles.
The promise of guidance is part of the pension revolution outlined in last month’s Budget including greater freedom and flexibility on how people use their defined contribution pension savings.
The Budget reforms have raised fears of people spending all their pension funds. However, the study however found just 5% plan to blow all their money and rely solely on the State Pension.
Willingness to spend depends in part on how much savers have – 44% of those with a pension pot £30,000 will use it all to provide retirement income whereas only 14% of those with a fund of £250,000 would do so.
There is bad news for insurers selling annuities – just 9% of those asked say they will rely purely on an annuity for retirement income. However 26% intend to use a mixture of annuity, drawdown and cashing in; 14% will use an annuity alongside cashing in part of their funds and 7% would consider annuity as well as drawdown for their pension funds.
David Black of Consumer Intelligence said: “Decisions about retirement income are ones that people literally have to live with so it is clear that people want to take them seriously.
“Face to face guidance is by far the preferred option for the free advice proposed by the government with most people willing to travel to ensure they get as much help exploring their options as possible.
“However, it does appear that claims about people blowing all their cash on Lamborghinis are not going to come true. Most people realise that they will be retired for a long time and that they will need to ensure that they have enough income to last.”
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