Around one in 10 regret early pension withdrawal as half forego advice

Around one in 10 retirees (8%) aged 55 or older who had taken money from their pension pot before reaching State Pension age regret it, according to research.

Nearly half (49%) of this group chose not to get advice or guidance before accessing their pension. Only 27% spoke to a regulated financial adviser before withdrawing money from their pension.The findings come from research by our parent company, Just Group, carried out by Opinium, and based on 1,050 retirees. 

Almost a third (32%) of this group say they needed the income to bridge the gap to State Pension age or because of redundancy or lower earnings. More than half (52%) had retired sooner than expected.

Alongside these findings, Just Defined Benefit (DB) has also delved into the views of 1,505 people with private sector DB pensions. Our research, published in October 2024, reveals that many individuals in this group don’t feel confident about retirement planning. Around one in five (22%) of 50 to 60-year-olds aren’t confident about their retirement plans, while 26% don’t feel supported to make decisions.

A similar proportion (20%) are also put off getting advice due to concerns about cost. Only 26% earning under £20,000p.a. have used a financial adviser. And around one in 10 (11%) of those not confident about their retirement plans have used an adviser.

At Just, we know how important it is for members to feel confident about making complex financial decisions to achieve the retirement they want.

Andy Fryer, Head of Proposition Development at Just, commented: “It’s concerning that a significant proportion of retirees are diving into their pension before leaving full-time work without the benefit of any financial advice or guidance.

“Tapping into their pension pot may be a sound decision for some, but it’s inevitable that, without advice or guidance, others may make decisions they’ll regret. I would urge anybody considering doing this to make use of the Government-backed, free, independent and impartial guidance service, Pension Wise, as a minimum.”

The Financial Conduct Authority’s latest Retirement Income market survey results revealed that more than half (57%) of people who bought an annuity policy in the 12 months to March 2023 didn’t use any advice or guidance, compared with 41% in the 12 months to March 2022.

Opinium research conducted in August 2023