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Half of UK adults willing to pay for financial advice on pensions choices

29 October 2015

Only one in 50 (2 per cent) people would pay over £1,000 for advice on a defined contribution pension pot worth £61,000, new research from Citizens Advice finds.

The national charity is urging the Financial Advice Market Review to explore how to radically reduce the costs of advice options for people who don’t have a big budget for help.

In The Affordable Advice Gap Citizens Advice uses the example of pensions advice to highlight the scale of the price gap, where people want financial advice but are not willing or able to pay current prices. Using initial quotes from IFAs the research shows that on average it is likely to cost £1,490 to take financial advice for taking a flexible income from a pension pot of £61,000- significantly more than most people are willing to pay.

Based on a YouGov survey of over 2,000 adults the report reveals how much people would be willing to pay as a one-off fee for financial advice on how to take an income from a private pension pot worth £61,000.

  • Nearly half (47 per cent) said they would be willing to pay some fee.

  • One in six (16 per cent) would be willing to pay between £200 and £1,000.

  • Nearly one in three (29 per cent) would pay up to £200.

  • Just under a third (30 per cent) said they would not be willing to pay for advice in this scenario.

Based on separate ComRes polling The Affordable Advice Gap finds that more than half of consumers with defined contribution pensions want expert help with how to withdraw their savings. The report reveals that the free Pension Wise guidance service and paid for IFA advice are the two places people are most likely to turn to for help. The relationship between these two types of support is also clear,  as more than two in five (44 per cent) people who plan to pay for an IFA also intend to have a Pension Wise session.

Gillian Guy, Chief Executive of Citizens Advice, said:

“The market needs to adapt to those without a big budget for financial advice. In light of the pension reforms it is clear that people want advice about how best to use their retirement savings. But many are falling foul of the price gap, as they are unwilling or unable to pay what can equate to an entire month’s salary in order to get advice.

“High quality, in depth advice from IFAs has an important place at the top end of the market, and likewise free guidance plays a vital role in informing consumers. But there is a real gap in between. Reviewing the regulatory burden on financial advisers, while ensuring consumers remain protected, could enable more people to access the advice they want at different prices levels.

“For the new pension freedoms to be successful, consumers need to understand their options. This is a huge opportunity for independent financial advisors who can offer lower price products and services, as well as for innovations such as digital advice tools working alongside face to face advice. ”

The Affordable Advice Gap also identifies the challenge people can face getting an indication of how much financial advice will cost them. The results of a mystery shopping exercise by Citizens Advice found that people were not able to get an initial quote for advice in almost three in five (58 per cent) of calls to IFAs.

Notes to editors

  1. Total sample size for the YouGov Plc. survey was 2,041 GB adults. Fieldwork was undertaken between 2nd - 5th October 2015.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

  2. ComRes survey of 1,386 UK adults, including a representative sample of 572 people who had not yet taken their pensions. Respondents were all aged 50+ and those with DC pensions had not yet started accessing them. The survey was conducted between 14th and 28th August 2015.

  3. By calling 323 IFAs Citizens Advice found that it costs an average of £1,490 to take financial advice based on initial quotes for taking a flexible income from a pension pot of £61,000. Please refer to methodology section of The Affordable Advice Gap for full mystery shopping details.

  4. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.

  5. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.

  6. To get advice online or find your local bureau in England and Wales, visit

  7. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.

  8. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.