Four out of 10 people buying drawdown or other decumulation pension products last year did so without seeking financial advice, according to analysis of FCA data.
This is the highest proportion of non-advised decumulation solution sales since the pension freedom reforms were introduced in 2015.
In total 104,774 people took a decumulation product in 2021 without advice, which represents 40 per cent of total sales, according to analysis by retirement specialists Just Group.
In 2015, when these reforms first cam in just 33 per cent were non-advised sales, while this rose to 41 per cent in the last quarter of 2021.
Just Group points out that in reality the figure could be even higher as the FCA’s product sales data only includes sales of decumulation products – guaranteed income for life and drawdown plans. It doesn’t include the 300,000 plus defined contribution pensions that are fully withdrawn each year, typically by people not taking either advice or guidance.
Just Group group communications director Stephen Lowe says: “We are now seven years on from the ‘freedom and choice’ reforms and take-up of professional advice and free guidance is going backwards – surely this can’t be what the government had in mind?
“Pension Wise is the lifebelt George Osborne promised every saver when pension freedoms were announced but only the rare few get it. Evidence given to the Work and Pensions Committee by MaPS found that an earlier nudge is more effective in getting people to Pension Wise. But it seems the longest-serving pension minister and the FCA are content to let people flounder their way into retirement and not even trial this.”
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