Better off at retirement

Recent research undertaken by Dunstan Thomas, who provide software solutions and support for financial services companies, suggests that clients of financial advisers could be better off in retirement than those who manage their own financial affairs.

According to the Dunstan Thomas Baby Boomer Retirement Planning Study, which was carried out on those aged between 54 and 71, clients of financial advisers could on average hope for a total post-retirement, pre-tax household income of £33,557.45 compared to an amount of £20,373.40 for those who don’t seek professional advice and have chosen to look after their own retirement planning.

The average overall pre-tax income in retirement from state and personal pensions and other investment sources is set to be an average of £23,376, across the 54-71-year old age range.

Whilst it is worth noting that those who seek out a financial adviser may very well have a larger savings pot to start with, Dunstan Thomas’s director of retirement strategy made the point that “financial advisers instil the financial disciplines of saving, planning, and reviewing progress, which helps build long-term savings”.

Other findings from the survey suggest that up to 1 in 7 (14%) are thinking of releasing equity from their home to supplement their income in retirement and nearly a third were considering downsizing.

Just one in six of those surveyed knew what their level of retirement income is likely to be with any accuracy. Only 20% had sought or were planning to seek face-to-face regulated financial advice while 17% had looked for or were intending to look for guidance from organisations such as The Pensions Advisory Service or Pension Wise and 25% used newspaper finance pages for guidance.

Perhaps most worryingly 47% of this generation intended to do nothing about gaining more knowledge of their options prior to retirement and nearly a third (29%) didn’t understand at all the options that are now open to them from age 55 under new Pension Freedoms rules.


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