A research poll found that just 1 in 5 of people would ask an adviser about their pension, leaving a huge guidance gap.

YouGov research found that 1 in 5 of people will ask a financial adviser about their pension pot, whereas 3 in 10 would prefer to do it online.

Advice plays an important role in member's decisions and changes to pension freedoms has opened up a realm of possibilities that members may not understand.

The recent research undertaken by YouGov on behalf of The Peoples Pension found that only one in five of the general public (18%) currently use a financial adviser and that nearly three in ten (30%) who have a pension would prefer to use online tools for financial advice than speak to a financial adviser.

Roy Porter, Director of Business Development for The People's Pension, says "Our research suggests that a lot of people are not taking advice at the moment. Whether that's because of cost, lack of awareness or fear, it's creating a big guidance and advice gap which needs to be filled."

LV = has found that almost half a million people retire each year without seeking advice. Those people could be missing out on benefits and options available to them.

In light of the research poll, B&CE, provider of The People's Pension, has joined forces with LV = to offer an online planning service to members approaching retirement.

The online tool will provide people with an alternative to traditional advisory routes; The People's Pension says they believe advisors are still important to people wishing to make decisions based on individual circumstances and will predominantly promote this advice.

However, there is a 'guidance gap' that needs to be filled for those not choosing to take this path.

"That's why we're really excited to be working with LV= to launch these new options for our members. The free guidance report should help savers assess their options, and at just GBP 49 for detailed online retirement advice, this brings an additional affordable choice for our members to help them obtain a good outcome from their retirement savings" says Porter.

John Perks, Managing Director of Retirement Solutions at LV= said: "LV= is delighted to be working with The People's Pension to offer their members a convenient, affordable solution and help make regulated advice more accessible, even for those with smaller pots."

From next month, the 2.3 million members of The People's Pension and the construction industry scheme EasyBuild will have the option to use the online solution if they don't want to seek traditional financial advice.

First published 24.02.2016

ceri.pugh@wilmingtonplc.com