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How to get pension advice and guidance for your retirement
Professional advice can help you make the most of your pension savings. Find out how much it typically costs and how to find an adviser.
Why should I get advice about my pensions?
If you have a defined contribution pension, you'll need to decide how to turn your savings into an income when you reach retirement.
You can take up to 25% of your pot tax-free from the age of 55 (rising to 57 in 2028), and then access the rest of the money by using any combination of: buying an annuity, using pension drawdown and taking lump sums.
If you're unsure about how to maximise your pension savings either pre or post-retirement, a regulated independent financial adviser can help.
Here we look at typical advice costs, plus advice alternatives to consider.
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How much does pension advice cost?
Advisers must agree upfront how much you will pay for their services, but it's not always easy to find this information before making contact with a firm.
Charging structures vary, but it's common for advisers to charge a percentage fee based on the value of your pot.
You can expect to be charged an initial fee, usually ranging between 1% and 4%, and an ongoing, annual charge between 0.5% and 1.5%.
Some firms charging a percentage-based fee may be reluctant to take on clients with a smaller pension pot or investment portfolio as they are less profitable.
Alternatively, advisers may charge a flat fee or an hourly rate (the average is £150 an hour).
VouchedFor, which operates a directory of IFAs, conducts an annual survey of advisers to gather information on average fees and charges.
Here's how much you could expect to pay based on two different scenarios:
| Initial fee | Ongoing costs | Total average cost (2024) | |
| Consolidating three pensions worth £500,000 and getting ongoing advice about them for five years | £8,881 | £18,987 | £27,868 |
| Investing £250,000 and getting ongoing advice about it for five years | £5,165 | £9,940 | £14,805 |
Is financial advice mandatory for pensions?
No, it's up to you whether you seek financial advice to help make decisions about your pension.
However, if you have a defined benefit pension (also known as a final salary pension) and are considering transferring this to a defined benefit scheme, you will need to take financial advice first.
Unlike defined contribution pensions, defined benefit pensions give you a guaranteed income when you come to retire, which often rises with inflation each year.
For this reason, it's usually best to leave your money where it is.
How do I find a financial adviser?
It's important to shop around when looking for an financial adviser. A comparison site is a good place to start; Unbiased and VouchedFor are the biggest.
You can use their filters to narrow down a shortlist based on areas of expertise and customer reviews. We recommend setting up meetings with at least three financial advisers so you can decide which can provide you the best service for your needs, and the best value for money.
- Find out more: how to find a financial adviser
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What if I can't afford pension advice?
The cost of financial advice about your pension can run into thousands of pounds.
This is a barrier for many people - but there is a way to use your pension savings to help fund these costs.
If financial advice isn't affordable for you, make sure you take advantage of free guidance services instead, like Pension Wise.
The pension advice allowance
The pension advice allowance lets you withdraw up to £500 tax-free from your pension savings to put towards the cost of advice.
You can do this up to three times (in different tax years), so you can access retirement advice at different stages. You may, for example want advice when choosing a pension, and again when you're deciding what to do with your savings.
Your pension scheme will transfer money directly to your adviser.
The pension advice allowance is available at any age, but only if you have a defined contribution pension.
Employer-funded advice
Employers can offer to pay for financial advice for their employees without any income tax being due on this benefit.
This exemption applies to the first £500 of advice in a tax year.
Pension Wise
If you’re 50 or over and have a defined contribution pension you can get free guidance from Pension Wise, the government-backed service run by MoneyHelper.
Unlike advice, this offers general rather than personalised information or recommendations, and consists of hour-long face-to-face, telephone or online appointments.
Targeted support
The Financial Conduct Authority wants to address the gap between bespoke financial advice, where you receive personal recommendations about what to do with your money, and guidance, where you get more general information about your options.
It has set out proposals for free 'targeted support', which would allow firms to provide support to consumers in different scenarios – for example, where someone is uncertain about how to take a retirement income.
Firms would be allowed to provide a bespoke suggestion to specific groups of consumers who share the same characteristics – rather than being based on an individual's exact circumstances, as is the case with full financial advice.