Advice black hole looms for UK pensioners
THOSE APPROACHING retirement could face an advice “black hole” according to a new report by PwC.
Under changes announced by the chancellor in his Budget last month, people about to retire will no longer be forced to buy an annuity product, opening up a range of other options.
But a new study by PwC claims that consumers may be left to fend for themselves without the advice they need if the government does not provide the service.
“Sixty-three per cent of consumers have or intend to ask for financial advice from an independent financial advisor on how they will access their pension pot,” said Jonathan Howe of PwC.
“However, many consumers may not have a big enough pension pot to justify significant advice fees. What we will see is an advice ‘black hole’ – a supply gap between what consumers want and what they can get.”
The report also found that the annuities market in the UK could shrink by up to 75 per cent as a result of George Osborne’s changes, with just 16 per cent of people polled saying they would buy an annuity in retirement.