We’re indebted for this information to pension consultancy Dunstan Thomas which asked just over 2,000 UK consumers about their pensions and where they got advice. The findings are not good news.
Only 8% of middle aged savers see an IFA regularly
My guess is that many Financial Planners see the 39-54 age group as a key demographic, the clients of tomorrow. People are just beginning to realise they will be retiring in the forseeable future and planning for retirement is beginning to become an important factor.
If the Financial Planning profession is to expand and prosper it needs to reach this group; many - if not most of whom - would benefit from advice.
Yet their take-up of financial advice is dismal. Only 8% regularly see an IFA, or put another way, 92% of Generation X-ers fail to take any independent financial advice on a regular basis.
It gets worse.
Some 84% take no advice at all from anywhere or consult only their partner before making key financial decisions. It’s no suprise that only 5% are saving enough for what the experts predict would be even a modest retirement.
Ignorance is widespread. Nearly half of female respondents and more than a third of male respondents had never heard of the Pension Freedoms.
Substantial numbers believe they will never retire properly and with 25% saying they had no pensions or investment savings at all that’s no surprise.
Many expect to only ‘semi-retire’ and a large number hope an inheritance will sort them out.
Looking at the responses in detail what comes across is overwhelming pensions ignorance and a worrying reliance on time or good luck ‘sorting things out’ (my words).
The survey lays bare what many think in Financial Planning - that ignorance of savings and pensions is not just widespread in the population, it’s the norm.
The outlook, realistically, is not good. Many millions will retire in poverty or rely on a mixture of charity and part-time work to keep them going.
If we’re not careful ‘Generation X’ will turn into ‘Generation D’ - D for Disaster.
Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with 30 years experience. This topical comment on the Financial Planning news appears most weeks.