Pensions - Articles - More retirees are shunning decumulation advice

Analysis of sales data by Just Group shows both the overall number and proportion of advised decumulation sales have fallen in the last five years. Retirement specialist says figures a concern given complexity of decisions and low take-up of free, impartial and independent guidance

 Fewer retirees are taking regulated advice before switching their pension cash into income drawdown and guaranteed income for life solutions, latest product sales data from the Financial Conduct Authority1 shows.

 Analysis by retirement specialist Just Group found that of the 267,204 decumulation products sold in 2022 just over 41% were sold without advice compared to 34% in 2018.

 In the same period, the annual number of advised sales dropped by 7% to 157,011 while the number of non-advised sales soared by 24% to 110,193.


 Stephen Lowe, group communications director at Just Group, said that the trend towards lower take-up of regulated advice is concerning given the complexity of the decisions facing pension savers as they switch to decumulation.

 “Advice is important in a market where there are multiple providers with often quite different rates on offer, as is the case in the annuity market,” he said.

 “And those who want to use drawdown find it almost impossible to shop around without professional help to compare providers to get the best deal because the product’s charging structures, investment choices and fees are so complex and varied.

 “Unfortunately, the figures show increasing numbers of individuals going it alone which significantly raises the risks of poorer outcomes in retirement.”

 He said the figures are particularly worrying because only a minority of non-advised customers take up their entitlement to the free, independent and impartial pensions guidance offered by Pension Wise which was put in place after the 2014 pension reforms to help savers understand their options at a crucial point of life.

 “We are now eight years on from the ‘freedom and choice’ reforms and use of the professional help available – either advice or guidance – is slowly but surely slipping away, even though we know the average value of pensions used to buy annuities and drawdown has been increasing.

 “The regulator and policymakers have a responsibility to make sure people are making informed and considered choices that they don’t later regret. These figures put a big question mark over their success so far.”

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