The number of drawdown customers accessing financial advice has fallen below 50% for the first time.
Data from the Financial Conduct Authority showed that of the 280,000 plans that entered income drawdown during 2023/24, 46% sought financial advice compared to 66% five years earlier.
Retirement specialist Just Group said use of advice had fallen across all methods of accessing pensions over the same period, except for annuities where it has risen from 26% to 32%.
Stephen Lowe, group communications director at Just Group, said: “Retirement decisions are some of the trickiest financial decisions that people will ever face. That’s particularly true for income drawdown where the saver is being asked to shoulder all the longevity and investment risk and is likely to find their income fluctuating over time.”
Lowe said that with people growing more dependent on defined contribution pensions to supplement their state pension, advice will become increasingly important.
“These figures reinforce the need for the industry to develop and promote advice models that can help people plan their retirement finances. The government needs to work harder to encourage many more people to take up their entitlement to the free, independent and impartial guidance from Pension Wise which is highly regarded by users but is still only used by one-in-10 accessing pensions,” he added.
