Tuesday, 17 July 2012

Financial advice could boost retirement income by as much as £232 a month, according to a report released today. 

The report, from Unbiased and Standard Life forming part of the Value of Advice Campaign, shows that taking independent financial advice could provide consumers with a retirement income boost of more than £2,780 a year on average.

This equates to a monthly increase of as much as £232.
The report found that there were three main reasons for this: first consumers who have taken pension advice contribute over one third more to their pension pots than those who have not; second, those who have received independent financial advice are financially better protected than consumers who have not.

The report demonstrates that 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 have not taken advice think that people should be putting away, on average, 9% of their total salary, compared with 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 in retirement income (based on the advised figure) versus £261 a month (non-advised).

Karen Barrett, chief executive of unbiased, stressed the importance of relaying the value of advice to customers: "It's vital to that they know that when people are planning their finances, they should consider taking independent financial advice.

Our joint report shows that those who have taken advice are far better positioned 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."

Barret explained why every adviser should be emphasising the value of their advice and how they should be doing it in this recent IFAonline video.

Read more: IFA Online News

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