Self-confidence keeps people from seeking financial advice

Two out of five adults who do not take professional financial advice say it is because they are confident they can make the best financial decisions for themselves, a new study has found.

Research carried out for the 2015 Value of Advice report from insurers MetLife and unbiased.co.uk, which enables consumers to find professional advisers, revealed that the numbers who were confident they needed no professional advice (40 per cent) far outstripped those who were put off by the cost (11 per cent).

But the research, published on 14 July, found that people who took professional financial advice could receive an average £48,279 extra in retirement income than those who did not.

Simon Massey, wealth management director at MetLife, said: “Pension freedoms have given retirement savers more choices and flexibility but the increased freedom to cash in pension funds means an increased risk of running out of money in retirement.

“Certainty over income in retirement will be increasingly important now that savers have more choices and that should highlight the value of advice in retirement planning.”

Karen Barrett, chief executive of unbiased.co.uk, said: “Life-changing sums of money may be at stake if people don’t make wise financial decisions, so those taking a DIY approach to these critical choices may well live to regret it.

“A general sense of financial confidence is not at all the same as an in-depth knowledge and experience of financial products, allowances, regulations and ‘What if?’ scenarios. A non-specialist can’t possibly be expected to keep on top of all that.

“Professional advisers make it their business to know these things and can tailor plans accordingly – and these plans provide people with true confidence that they are doing the very best they can with their money.”