Lack of consumer awareness on pension freedoms biggest concern for advisers

New research has revealed that a lack of consumer understanding around pension freedoms is one of the most significant concerns facing advisers.

The findings from Prudential found there to be a strong backing of the pension freedoms from advisers, with around 81% In support of the reforms.

However, the changes were described as ‘very successful’ by just under a third, with consumer awareness being cited as one of the main obstacles to the scheme’s success.

Almost half (49%) expressed concern over savers being financially unprepared for later life, whilst unexpected tax bills and mis-selling risks were cited as the biggest risk to support for pension freedoms by 45%.

41% also highlighted the risk of fraud.

Where suggestions to build the take-up of guidance were concerned, increasing subsidies for advice in the workplace was supported by 26%, whilst 23% said they would back their employer being able to deliver guidance and facilitate advice.

Commenting on the research was Vince Smith-Hughes. The retirement income expert at Prudential said:  “This research highlights just how beneficial it is for people to take high-quality advice as they approach the end of their careers. People approaching retirement like the idea of being able to access their pension funds but there are many pitfalls that advisers can help them avoid.

“Advisers recognise that a lack of understanding can lead to consumers drawing too much money and running out of money too early in retirement, incurring unexpected tax bills or saving their money in inappropriate types of investment.

“The earlier those approaching retirement engage with retirement planning, the better.”

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