Financial advice linked to higher retirement income satisfaction

Financial advice is the strongest predictor of retirement income satisfaction and financial preparedness, according to research from wealth manager Quilter

The wealth manager's latest Retirement Lifestyle Report, based on a survey of 5,002 UK retirees, found that 92% of advised retiree households were satisfied with their retirement income, compared with 74% of retirees overall and 47% of those who had never sought financial advice. Among individuals, 88% of advised retirees were satisfied, compared with 43% of those who had never received advice.

Advised retirees were significantly more likely to review their plans in response to changes to pensions and tax policy. They were also more likely to respond to changes in retirement policy. Just 11% expected to take no action in response to future policy changes, compared with 79% of retirees who had never received advice. Almost two-thirds (63%) of advised retirees said the current political and policy environment was affecting their inheritance tax planning, compared with 8% of those who had never sought advice.

Across the wider retiree population, 69% said they had changed their financial plans in response to government policies or proposals over the past year. In response to planned pension inheritance tax reforms, 29% intended to spend more of their pension savings during their lifetime, 26% planned to give away more pension wealth and 24% intended to access their pension savings earlier than originally planned.

Kirsty Anderson, retirement specialist at Quilter, said: “Our research shows that receiving financial advice is the strongest predictor of financial confidence and satisfaction in retirement. While the level of personal wealth is naturally a factor, the gap between advised and non-advised retirees suggests advice itself plays a significant role in helping people achieve better retirement outcomes.

"Retirement planning has become considerably more complex in recent years. People are having to navigate changes to pensions, inheritance tax, savings policy and wider tax rules, often while balancing their own financial needs alongside supporting children and grandchildren. Our research shows advised retirees are much more engaged with these developments. They appear more willing to review existing plans, consider their options and take action where appropriate, rather than simply hoping changes will not affect them."

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