Many people invest and save during their lifetime to have enough money at retirement but not everyone is getting advice from professionals to bolster their pension pots.
The Financial Services Compensation Scheme (FSCS) polled 2,000 UK retirees aged 55-75 and found that just 12% said they had taken advice from an IFA to help them make their money go further.
But 20% have considered riskier pensions and investments products, as they offer a higher rate of interest.
The research revealed that the UK’s prolonged low interest savings environment has had a direct impact on retirees’ financial decisions, tempting them to review high interest investment products that they would not usually consider.
It also found more than a third (36%) have invested their money after retiring.
Lifeboat
Although the majority (69%) of the respondents said they knew all their investments were FSCS protected, only 36% of investors knew the exact amount of FSCS protection available for their money.
This means they could unknowingly be putting money in investment products beyond the FSCS’s compensation limit, which would likely be lost if the provider went out of business.
Caroline Rainbird, FSCS chief executive, said: “We are seeing increasing numbers of customers seeking compensation from FSCS due to failed pension and investment products, or poor advice.
“The real danger is that if consumers choose to put money into high interest pension and investment products that are not FSCS protected, they could lose life changing sums of money from their retirement pots if the product provider fails.”
