Financial advice key for a rich retirement
Thursday, 07 September 2006 12:00
The majority of people who take financial advice before leaving work have a comfortable retirement - while most of those that do not bother end up cutting back to afford to live on their pension.
But new figures from Fidelity International show that three quarters of Britons have not contacted a financial adviser for help with planning their retirement.
"Our research has highlighted the worrying fact that only a quarter of people are switched on to the significant benefits of seeking financial advice now in order to prepare for their old age," said Simon Fraser of Fidelity International.
"Whether or not you seek financial advice may ultimately affect the comfort and quality of your retirement."
Data from Fidelity shows that 60 per cent of people who retire without seeking professional advice are forced to make cutbacks in their lifestyle to afford to live on a pension.
By contrast, some 70 per cent of the people who consulted with an adviser before retiring managed to maintain their lifestyle once they finished work.
Additionally, twice as many people who consult with a financial adviser retire with a pension pot of more than £50,000, compared with those that chose to remain unadvised.
However, younger people are now speaking to advisers more.
"Positively, our research showed that nearly 30 per cent of people under 35 have already considered contacting an adviser in future [compared with the national average of 25 per cent]," Mr Fraser said.
"Certainly a move in the right direction, but one that cannot come soon enough, after all for the under 35s there is a double benefit.
"The sooner people start to save, the more the potential value of their investment.
"One pound invested in a pension at age 25 has double the potential value by age 60 of £7.88 compared to just £3.37 for savers who started at age 40.
"Professional advice and time are key ingredients for securing a comfortable retirement."
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