Financial advice doesn’t need to cost a fortune, but those who seek it tend to feel more in control and better prepared for retirement, says Steve Butler, CEO, Pension Potential.

New research from Canada Life[i] highlights the important role professional advisers’ play in later life planning, particularly for retirement. The research showed that 75% who use an Independent Financial Adviser (IFA) are satisfied with their lives, and almost six in 10 (58%) feel in control. However, only 23% of people have used an IFA, and 42% don’t know where to turn for advice.

Steve Butler said: “Many people in the UK think financial advice is too expensive, leading to a significant ‘advice gap’ between those who can afford it and those who can’t. Yet, research shows that taking advice is hugely beneficial—not only in helping people feel more in control but also in ensuring they don’t run out of money in retirement.”

The 2024 Langcat report[ii] shows that only 9% of consumers have paid for financial advice in the past two years, down from 11% in 2023, yet 91% of consumers who have paid for financial advice have found it helpful.

Advisers typically charge a percentage of the amount invested. The Financial Conduct Authority (FCA)[iii] states that the average charge is 2.4% of the amount invested for initial advice and 0.8% a year for ongoing advice (1.9% p.a with underlying product and portfolio charges factored in).

Butler adds: “With people living longer and often spending up to a third of their lives in retirement, it’s critical to start planning early and to seek financial advice when the time is right. Digital solutions are a game changer, bridging the advice gap by providing cost-effective, scalable, and personalised advice. They also provide retirement planning tools, helping people take control of their pension planning as early as possible.”

Pension Potential has a range of simple tools including online retirement and lifestyle calculators and an ‘all of market’ annuity search solution to select the best deals. It also gives access to personalised retirement recommendations with an easy to follow ‘advice journey’ which ends with a video call with a financial adviser.

They advise on ‘Retirement planning – Income in Retirement’ products, including drawdown and annuities, with fees broken into two parts: advice and implementation. The charge is £500 for advice, and then an implementation fee for arranging an individual’s pensions and setting them on the path to retirement. The implementation fee is set at 1% of the value of their pensions, with no hidden costs.

For more information visit: www.pensionpotential.co.uk.