According to the latest product sales data provided by the Financial Conduct Authority (FCA), there is a growing number of retirees who are not taking advice when purchasing income drawdown and guaranteed income for life products.
The analysis, provided by retirement product specialists Just Group, has revealed that 40 per cent of decumulation products, which include guaranteed income for life and drawdown plans, purchased by pension savers last year were obtained without regulated advice.
This equates to the purchase of around 104,774 decumulation products where savers went it alone.
According to the research, this was the highest number of decumulation products sold where advice wasn’t taken from a professional financial adviser.
This isn’t a new trend and the number of ‘non-advised purchases’ has been rising steadily from 33 per cent in 2015 to 41 per cent during the final quarter of last year.
The dangers of DIY drawdown
Purchasing pension drawdown products without the advice of a professional can create unexpected risks that could jeopardise your retirement, which include:
- Not having a sufficient retirement income to meet your needs
- Buying a pension product that isn’t suited to your existing savings or risk appetite
- Investing your savings in a plan that has poor returns
Savers wanting to avoid these risks should seek out professional financial advice to create an effective drawdown strategy that takes into consideration your plans for later life and your current savings.