Born between 1946 and 1964, baby boomers are currently preparing for, or settling into the early years of, retirement. With ages ranging from the early 50s to the early 70s, this is a segment of the population which need to be clued-up on all things pension related.
Unfortunately, over two thirds (66%) of baby boomers have never taken financial advice.
Even more concerningly, 47% say that they have no plans to do so either, leaving them with a lack of financial knowledge and planning before retirement, according to research by Dunstan Thomas.
Rather than turning to professionals for advice, the baby boomer generation prefer to get their information from a mix of digital and print resources, including:
- The financial pages of national newspapers (25%)
- Guidance services such as Money Advice Service, The Pensions Advisory Service and Pension Wise (17%)
Is that so bad?
Not entirely; the 17% who look to guidance services are doing the right thing by becoming informed and taking an interest in their finances, at least. But the information given on these websites is very generalised. Whilst factual and informative, it is not tailored to the needs of the individual reading it, unlike professional financial advice from an adviser.
However, it is worrying that a quarter of baby boomers are relying on national newspapers for their financial information. Whilst guidance services are a non-biased, informative solution, newspaper content is written for one purpose, and helping you to make effective financial choices is not it.
When planning for the future, it is vital to know the difference between guidance and advice, to make sure that you use the information in the appropriate way.
How is advice and guidance different?
36% of baby boomers said that they do not know the difference between financial advice and financial guidance. This is worrying, as they each have a different purpose and should be used in different ways:
- Advice: Given by a qualified professional, the advice is tailored to suit your individual circumstances and needs. This is often a paid-for service from a firm or individual whom you have actively sought out to give advice.
- Guidance: Often freely available information, whether online or in print, guidance is generic financial information which is used to explain how finances work, or what different products do. Guidance is not usually intended to sell a particular product. Services such as Money Advice Service, The Pensions Advisory Service and Pension Wise are trusted sources of financial guidance.
Why seek professional advice?
The study shows that one fifth of those surveyed planned to access regulated financial advice. When asked their reasons for doing so:
- 16% wanted the security of a professional opinion
- 12% were interested in finding out about Inheritance Tax (IHT)
- 8% wanted support when making weighty financial decisions
Whilst these are excellent points and valid reasons to visit a financial planner, there are additional benefits to be gained from doing so, including:
- Having a qualified professional understand your current circumstances in depth
- Working with a regulated professional to develop a plan to meet your financial objectives
- Support which is ongoing, rather than a one-off meeting
- The support of a professional with up-to-date knowledge of legislation
- Increased confidence in your decisions
Want to know more about managing your finances as a 50 – 70 year old? Get in touch with Ben