Updated 03 September 2020
Regrets, I’ve had a few… and one of those might be my pension. A recent survey reveals how people who shun financial advice when planning their retirement may live to regret it.
What are the most significant moments of your life? Your first job? Buying a home? Some would say you have to live most of your life before you can judge. When we asked a sample of over-55s this question, 35 per cent of them said that the most significant moment for them was their retirement.
What’s more, many of these individuals said they might have approached their retirement differently if they had known then what they know now. Nearly three quarters had not taken professional financial advice when planning their retirement, and one in five of those say that they now regret this. A further 17 per cent who didn’t seek advice at the point of retirement now believe that this was a mistake.
You might argue that’s not so bad: three quarters of retirees felt they didn’t need advice, and four in five of those still believe they made the right decision. Indeed, a solid 39 per cent were convinced that they would make the right decisions on their own, and a further 18 per cent didn’t think that financial advice would have altered their choices. So is the general public incredibly well clued-up about financial matters?
Maybe not. One question we asked of all age groups was ‘How would you describe your current understanding of the new pension rules and how they affect your choices at retirement?’ The age group most likely to say their knowledge was ‘Very good’ was – perhaps surprisingly – 18 to 34 year olds, with 22 per cent of them making this bold claim. But the ‘Very good’ response plummets to 5 per cent among older age groups. It’s hard not to wonder if the younger people are simply being complacent, with their own retirement a long way off. Meanwhile the older people, for whom it is an imminent reality, are far less assured of their own knowledge.
But maybe the younger people do know something that the others don’t. They are, intriguingly, the group that most regrets not seeking financial advice about pensions planning. In other words, it’s the more informed people who are most likely to see the benefits of seeking advice – while those who claim only an ‘average’ understanding are happiest to go it alone. Which doesn’t make a great deal of sense.
Regret isn’t something that we like to admit – certainly not towards the end of our lives. Our survey shows regret levels dropping among the older age groups, perhaps in a spirit of ‘what’s done is done’. But if you’re approaching retirement or planning for it, there is still time to improve your options and prospects with the aid of professional advice. ‘My way’ is a bold approach – but experience shows it’s not always the best one.