People who take financial advice are better off in retirement by an average £47,000 than people who don’t take advice, a new report has found.

Launched by think tank, International Longevity Centre UK (ILC), the report suggested that financial advice not only pays for itself, but boosts confidence and preparedness for retirement.

ILC argued that professional financial advice has “never been more important” and the think tank’s qualitative analysis, supported by St James’s Place Wealth Management, suggested that people who receive advice are also more confident, worry less and are better prepared for retirement than those who don’t take advice.

However, despite the benefits of financial advice for people of all income levels, ILC said a significant advice gap still remains in the UK, with less than one in six people taking advice, and particularly low uptake rates for women. Key barriers identified in the report were a lack of awareness of what advice is, as well as a lack of knowledge of where to find an adviser.

ILC has called on the government, industry and regulators to work together to extend the take up of advice and ensure an extra five million people understand enough to plan for later life by 2030.

“In a time where so much responsibility is put on us as individuals to plan for an uncertain future, financial advice has never been more important,” said ILC research fellow, Arunima Himawan.

“It’s not just about maximising retirement income, but about making a plan, feeling in control and having peace of mind.

“But despite the many benefits of advice, far too few people gain access to the support they need to maximise their financial and mental wellbeing. This is not a new challenge and there are no easy solutions. We have been talking about the advice gap for well over a decade.

“To achieve real change, we urgently need to see collaboration across industry and government to better communicate the financial and non-financial benefits of advice, to explore ways of reaching a more diverse customer base and to increase the supply and efficiency of advice.”

St. James’s Place chief executive, Andrew Croft, added: “This report from the ILC shows that working with an adviser you trust is the best step towards gaining control of your financial future and finding peace of mind.

“It is clear that advice has an important role to play in improving financial wellbeing and resilience across the nation, particularly at uncertain times like this.”

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