Over 50s confused about retirement planning

People facing retirement in the UK are more confused than ever about the complexity of current tax legislation and rules, complaining that they are changing so fast that information on what is ‘right' one month, may change to be ‘wrong' the following month, according to research from retirement specialist LV=.

Seven out of ten (70%) over 50s surveyed for the LV= ‘State of Retirement' report admitted they are uncertain about what legislation is correct, equating to an anxious majority of almost 7 million people facing retirement.

Despite their doubts, the majority of those facing retirement (56%) haven't taken professional financial advice at all about their overall financial situation, level of savings, and income in retirement, which equates to 5.5 million people in around 3.5 million households.

Rodney Cook, LV= Life & Pensions Managing Director, comments: "Our research shows that there is a massive opportunity for financial advisers in the UK. Around 3.5m pre-retired households are yet to take any professional financial advice, which is worrying as so many people facing retirement admit that they don't understand financial planning rules and legislation. And this is set to be a real growth area for the financial advice industry, as people are living longer than ever before, so will need effective retirement solutions to maximise their income."

Of those over 50s who have already consulted a professional about financial advice, independent financial advisers (IFAs) are the preferred source of information, with almost half (49%) of people facing retirement choosing to consult an IFA. And it seems the closer people get to retirement, the more they realise they may need help with their financial planning, as five out of ten of those aged 60 - 64 years (55%) have met with an IFA. The good news for IFAs is that they remain the preferred source of information about retirement planning and finances, above bank managers, solicitors and brokers. Just 4% of those aged over 50 years who have taken some form of financial advice have consulted a solicitor or a broker, and 16% have said they have consulted their bank manager.

The study also reveals that ISAs are the most popular topic for those who have seen a professional about financial advice - 43% of over 50s discussed ISAs, followed by low risk investments (30%), general pension planning (28%), and inheritance tax planning (20%).

Rodney Cook concludes: "This research highlights how important the role of the independent financial adviser is in helping the over 50s in the UK to make the most of their money, as too few people are taking proper advice on how to manage financially in retirement. With an ‘anxious majority' of seven million pre-retirement people admitting they are confused by the legislation surrounding pensions and retirement planning, it is clearly vital that people take advantage of professional advice to maximise their retirement wealth, to help ensure their comfort in old age."

The LV= Flexible Retirement Solutions business, launched in January 2008, offers a range of capital and income retirement planning products, offering a brighter future for those who are planning, or already in, retirement.

For more information about the range of retirement products and solutions available, financial advisers can visit: lvadviser.co.uk.