Fewer pension savers are taking advice when buying income drawdown and guaranteed income for life solutions, research by Just Group has suggested.

Just Group’s analysis of product sales data from the FCA revealed that 104,774, or 40% of the 262,261 decumulation products bought in 2021, were purchased without professional, regulated advice.

This was the highest number of sales of non-advised decumulation solutions since the pension freedom reforms in 2015.

Just Group also highlighted that non-advised purchases have been trending higher from a low of one in three (33%) in 2015, to more than four in 10 (41%) in the fourth quarter of 2021.

“The long-term trend has been a decreasing use of advice by consumers when they are making complex choices around how to use savings to fund retirement,” commented group communications director at Just Group, Stephen Lowe.

“We know only a minority of these non-advised customers take up their entitlement to free, independent and impartial pensions guidance, so these figures paint a troubling picture of more people making long-term retirement decisions every year without any professional advice, help or guidance.”

The FCA’s product sales data only includes sales of decumulation products – guaranteed income for life and drawdown plans. This doesn’t include the more than 300,000 defined contribution pensions that are fully withdrawn each year, typically by people not taking either advice or guidance.

“We are now seven years on from the ‘freedom and choice’ reforms and take-up of professional advice and free guidance is going backwards – surely this can’t be what the government had in mind,” Lowe added.

“We’re talking about large sums here – an average of around £67,000 for each pension used to buy a guaranteed income for life plan and more than £156,000 for the average drawdown solution.

“It’s inevitable that without advice and guidance some people will make decisions they’ll come to regret and much more needs to be done to stop so many continuing to fall through the cracks in the advice and guidance framework that the government and regulator have put in place.

“But it seems the longest-serving pension minister and the FCA are content to let people flounder their way into retirement and not even trial this.”

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