More than four million people within a decade of pension access are oblivious to free government-backed guidance, according to new research published by Just Group.

The retirement specialist revealed that millions of pension savers nearing the age they can start taking pension benefits are unaware of the free, impartial and independent guidance available to help them to understand their retirement options.

The research, based on responses from 1,000 UK adults aged between 45 and 54, indicated that four in five (81%) of those with defined contribution (DC) pensions did not know they will be entitled to receive free guidance from Pension Wise, which equates to more than 4 million people across the UK.

Only 19% said they knew about the service and Just Group suggested that recognition is low despite providers being obliged to promote the guidance entitlement to their customers as they approach 55 – the age when customers may first access their pension benefits.

“The pension guidance message is not cutting through,” commented group communications director at Just Group, Stephen Lowe. “Pensions are widely seen as complex and confusing.

“The promise to make impartial guidance available to all those with defined contribution pensions was made in recognition that pension decisions are not easy and that freedom and choice can only work if people are equipped to make informed decisions.”

Lowe also suggested that the low awareness figure for free guidance was evidence that expecting people to ‘opt in’ was never likely to achieve the take-up required, particularly among vulnerable groups and those with lower levels of financial capability.

“Receiving guidance must become the norm, just as auto-enrolment has successfully made saving in a workplace pension the norm,” he added.

“This year a record 940,000 people will celebrate their 55th birthdays which means more people will be able to start taking pension cash than in any previous year and many are unlikely to be aware of the free help available.

“The FCA is looking at ways to increase take-up of guidance. We really need the regulator to act quickly and decisively if hundreds of thousands more pension savers are not going to miss out on guidance and be more vulnerable to bad decisions and scams.”

Share Story: