Recent data found that advisers believe fraud and stock market volatility are the greatest risks to pension freedoms.
The Prudential study revealed that 20% of advisers identified the threat of scams as the one issue likely to reduce retirees’ support for pension freedoms, while the same amount thought investment market downturns were the biggest problem.
With a Public Health England (PHE) report saying older people are living longer than ever before, 49% of advisers are also warning about longevity risks due to retirees not knowing how long they will live in retirement. PHE’s figures show that men can now expect to live for a further 19 years at age 65 and women can expect to live for a further 21 years at age 65.
The study highlights that a lack of savings remains a major problem and 48% of advisers have rejected customers due to their funds being too minimal to offer any advice on.
They further advise that the most common mistake made by their clients is not saving enough money and not asking for advice early enough.
Vince Smith-Hughes, retirement income expert at Prudential, said: “Fear of falling victim to pension fraudsters is a major issue for retired people. Savers are having to take greater responsibility for ensuring their retirement funds last the rest of their life and there is a risk they pick the wrong type of investments or fall foul of fraudsters who promise high level of returns.
“This is why high-quality financial advice is good value for money. It will provide people with a financial plan for retirement, help them select the right type of retirement plan and also avoid fraudsters and inappropriate investments.
“Those people who have small pots can make use of the Government’s free guidance service, Pensionwise, which can help them understand their options, whether they choose to go on to receive advice or not. The Pensions Advisory Service also has some excellent information on how to avoid scams, including a tool to help identify when a scam may be about to occur.”
