The number of savers accessing drawdown plans for the first time without using regulated advice is a “red flag” warns Just Group.
The latest figures from the Financial Conduct Authority show that of the 962,000 pension plans accessed in 2024/25, less than a third (31%) were taken after receiving regulated advice.
Furthermore, less than half (45%) of the 350,000 drawdown plans accessed for the first time were taken after receiving advice, a significant drop compared to 66% in 2018/19.
The decrease in advice came despite a 9% rise in the number of pensions accessed to 961,575, largely driven by a 25% rise in drawdown plans.
Stephen Lowe, group communications director at Just Group, said: “While the numbers accessing pensions and using advice are up, the proportion of customers using advice has fallen for each withdrawal option since last year. The downward trend in use of advice for drawdown over time is particularly obvious and should be seen as a red flag.
“It is important that customers go into drawdown with their eyes open about the need to manage withdrawals to navigate the investment and longevity risk. Understanding these risks will help them improve the probabilities that their savings continue to deliver the income needed to last throughout their retirement.”
The number of pots accessed after using the Government’s free guidance service Pension Wise only accounted for 11% of pots accessed, the data showed.
Lowe continued: “Regulators said they would uncover better stimulus, incentives and processes to ensure a higher proportion of pension savers would benefit from using Pension Wise. This data confirms no progress has been achieved.”
He added: “The industry has been developing new advice models to bring the benefits of regulated advice to a wider audience. In the future, targeted support options may help more savers.”
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