Shopping for a retirement income is a bit like shopping for a holiday. Don’t get me wrong, retirement is a far more serious business than a fortnight in the sun, but there are some similarities…
When you buy a holiday, you probably start by having a look online. Then, depending on your budget and how complicated your needs are, you might visit a high-street travel agent to get some options to choose from. Or you might get advice from a specialist travel consultant. Compare that to buying a retirement income. Again, there are two main options:
1. Buy through a non-advised service. Like with a high-street travel agent, you’ll get your options explained and all the information you need to make your decision. For most people this is a very good way to buy a retirement income. You don’t get personal recommendations, but there’s a robust process in place to help you make a fully informed decision and select the right options to meet your needs.
2. Buy through an advised service. This is more like going to a travel consultant. You get full, professional advice and recommendations from a qualified financial adviser. As you’d expect, buying through an advised service can cost more than buying non-advised, but new rules introduced this year aim to make the cost of full advice clear so people know what they’re getting and how much it will cost.
How do you choose the right advice, guidance and support?
It might seem like a simple choice, but it can be difficult to make sense of the different options and associated costs. It doesn’t help that the charges are not always clear whichever level of support you choose - and especially if you buy through a non-advised service.
But there is hope on the horizon. Aviva is working with the retirement industry to encourage financial advisers and companies to always make their charges crystal clear. This will make it easier for customers to compare their options, and understand if they are paying competitive costs for the right level of advice, guidance and support for their needs. Find out more in the Rethinking Retirement in the UK report.
The stakes are higher
The thing is, retirement lasts a whole lot longer than a holiday, so it matters a whole lot more. And the cost you pay for advice, guidance and support can directly impact the amount of money you get in retirement. The difference may be small but over the years it could really add up.
You only retire once too. If you get it wrong, you don’t get to have another go next summer. That’s why it’s so important to get the right advice, guidance and support. If friends or family ask, I tell them to consider professional financial support and to shop around online for the best rate and the best source of help. I’d say the same to you. Our retirement centre is a good place to start whether you’re looking for an annuity or another retirement product.
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