It shows that 52% of people in this age group think they can make the correct decisions without advice, with many reporting a lack of understanding about what it offers, and disbelief that it represents value for money.
A year on since the UK government’s Financial Advice Market Review (FAMR) report published 28 recommendations to help make it more accessible and affordable for consumers, 33% do not know the difference between guidance and advice, and 15% think it is too expensive.
LV head of policy, Philip Brown, said: “The poor understanding of financial advice is particularly worrying at a time when consumers are faced with more complex decisions about retirement than ever before.
“Taking financial advice is vital to ensure consumers are equipped to make the most of their hard-earned savings and get the income they need in retirement.
“Although the work on FAMR is set to address the advice needs of the mass market, not enough is being done to educate consumers about the value of advice.
“Without further action to increase take up of advice we face a mis-buying crisis, and showing consumers why it is good value for money is a key part of this.”
A Pension Advice Allowance and tax-break for employer-arranged advice are due to come into effect in April as a result of the FAMR report. However, 68% of over 55s are unaware of the former, and 80% do not know about the latter.
LV’s findings reflect those found from a survey by Aegon earlier this year, which showed that only 8% of people in the UK speak to a financial advisor, and 47% make saving decisions themselves.
“Greater personal responsibility for retirement planning, combined with increased levels of economic and political uncertainty, mean people need professional financial advice more than ever,” Aegon pension director, Steven Cameron, said.
“The low take-up of financial advice is very worrying. Our findings emphasise the scale of the task facing the FAMR in making advice and guidance more accessible.”
LV recommends the creation of a single financial guidance body, which signposts people to advice and publishes regular statistics showing how many people are taking it, and says that the Financial Conduct Authority could do more to promote advice.
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