Retirement planning is no longer a case of saving as much as you can into a pension and then taking a regular income that lasts until death.
Thanks to the pension freedom reforms introduced four years ago, more people can tailor when and how they use their pension pot after the age of 55 – and more people choose to stay invested and even keep saving into it.
The key to this has been a shift over the past two decades that pushes responsibility for providing a retirement income away from former employers and onto savers themselves.
But while that creates flexibility it also means ordinary people must make difficult financial choices, so should more savers seek professional financial advice to plan their retirement and invest their pension for it? We take a look.
A financial adviser’s fees vary depending on the extent of the advice you need, how much time it will take, and the size of the assets involved
Broadly speaking, advisers charge between 1 and 2 per cent of the assets in question – a pension pot in this case – with lower percentages being charged for larger assets.
An adviser can only charge you an ongoing fee in return for providing an ongoing service, such as portfolio rebalancing – unless you’re paying off an initial charge over time through a regular payment product.
If you do pay for financial advice, the adviser has a duty to ensure their recommendations are suitable for you – including that the investments match up to the risk you are willing to take.
If things go wrong and you feel their recommendations were not suitable, you may have recourse to the Financial Ombudsman Service which can decide on individual cases and order a firm to pay you compensation.
Always ask an adviser if they’re independent or restricted.
Restricted advisers are limited to certain types of products (eg only annuities) or the providers they can choose from. Independent advisers cover the whole market.
If you decide that you’d like to speak to a financial adviser there are several online directories like Unbiased and VouchedFor that can help you find professional advice.
You can find FCA registered financial advisers who specialise in retirement planning on its register which is free to access.
The Money Advice Service has a similar directory.
Your pension questions answered
Are you trying to save for retirement, make the most of your income in old age, navigate the state pension maze, or just feel baffled by some bit of pension jargon?
In the This is Money podcast this week, former Pensions Minister and our regular columnist, Steve Webb, is on hand to help you out.
Editor Simon Lambert and host Georgie Frost are also joined by The Pensions Advisory Service boss Michelle Cracknell to answer reader questions.
Press play above or listen (and please subscribe if you like the podcast) at Apple Podcasts, Acast, Spotify and Audioboom or visit our This is Money Podcast page.