A new retirement planning service aimed at filling the so-called advice gap has been launched by Hargreaves Lansdown.
The company has made the move after its researchers estimated there would be demand from 120,000 investors a year for low-cost advice.

The HL Retirement Planning Service is a flat fee advisory service, set up, the company said, to “respond to a huge increase in appetite for pension freedom information”.

The cost is a flat fee of £395 plus VAT. Should an investor wish to move onto a traditional advisory service, this fee will be deducted from this cost.

Hargreaves Lansdown said its advisers charge fees of up to 2% of the value of the amount advised on for retirement planning advice, full details of our charges here.

The firm reported a 45% increase in calls and 76% rise in e-mails since the reforms took effect.

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Tom McPhail, head of pensions research, said: “The pension freedoms have fundamentally changed the pension system, overturning many established conventions around how and when investors draw on their retirement savings.

“The Pension Wise service provides investors with an invaluable introduction to the key issues they need to think about. The HL Retirement Planning Service takes investors a stage further than Pension Wise, walking them through the issues they need to consider when setting up their retirement income.”

A Hargreaves Lansdown survey of the over 55s, carried out this month, found 65% would value talking through their options with a retirement expert.

Key issues rated by as important, very important or essential - in order of popularity - were:

1. Understanding the retirement options: annuity, drawdown and taking a lump sum directly via Uncrystallised Funds Pension Lump Sum (UFPLS)
2. Understanding how to inflation-proof finances
3. Knowing where to go to get further information and how to get started (e.g. how to convert a pension fund to paying income)
4.Sense check current retirement income plans
5.Understanding the tax payable from each retirement option

However, 28% wouldn’t be interested in the service if they had to pay and over 50% said they would be willing to pay between £100 and £499 for this advice.

Industry wide advice fees for retirement income recommendations start at around £1,000, Hargreaves Lansdown said.

Mr McPhail said: “We estimate that around 120,000 people a year could benefit from an advisory service, a step on from Pension Wise. It gives them a richer, more hands on experience, whilst costing only around a quarter of a typical full advisory service.”