80% of people seek pension advice online. Here’s why the 20% are better prepared

We live in an age of instant access to information, and answers to complex questions are seemingly available at the click of a button.

Because of this convenience, a study by Zable reported in Pensions Age reveals that over 80% of UK consumers are turning to sources such as social media, search engines, and AI chatbots for pension advice online. 

The research also highlights that long-term pension decisions are among the most common areas where consumers rely on informal research. Approximately half of respondents admitted that they had sought pension-related advice from unverified sources. 

The problem lies in the fact that these sources are not just potentially unverified, but also unregulated, which could lead to negative financial outcomes with no legal recourse.

Here’s why the internet can fall short and a human professional remains one of your greatest financial assets. 

Generic financial advice has several critical flaws

It’s completely understandable why so many people start their retirement journey online. It feels private, it’s instant, and it’s free. However, when it comes to managing a lifetime of savings, generic online advice can carry substantial long-term risks. 

As part of its study, Zable tested four major AI platforms with common UK personal finance questions. 

The results revealed widespread inaccuracies, with platforms routinely defaulting to American financial systems and repeatedly recommending US insurance options or American 401(k) plans that have no relevance to UK taxpayers.

Moreover, the information provided online is often without context.

It’s easy enough to find a definition describing what a flexi-access drawdown or annuity is. The internet could give you an explanation in a few minutes. 

What it cannot do is evaluate your personal circumstances, assess your family dynamics, and provide guidance about whether these options are actually appropriate for you. 

Operating without a regulatory safety net could put your money in danger

Alongside the risk of receiving incorrect information, acting on unverified online advice could leave you exposed to financial loss. 

Surprisingly, Zable found that 68% of consumers do not check the risks involved before acting on informal financial advice.

Unregulated online sources have no legal accountability. So, if you make an error based on advice from a blogpost, video, or AI response, you have no legal recourse and are not protected by financial bodies such as: 

• The Financial Ombudsman Service
• The Financial Services Compensation Scheme. 

If an algorithm miscalculates your tax liability or a social media video steers you into a false investment scheme, you will bear the financial consequences alone.

Working with a regulated professional has distinct advantages

There’s a reason why 20% of those surveyed by Zable believe they can retire confidently. Working with a financial planner who understands your circumstances provides advantages that a digital or DIY experience simply cannot replicate.

1. Personalisation over generic logic 

A search engine is only able to look at an isolated query, whereas a financial planner looks at your entire life. We can align your retirement strategy with your cash flow, property assets, estate planning goals, and the lifestyle you wish to lead. 

2. Advanced tax efficiency 

Building a retirement pot is only half the journey, as tax plays a key role in how much money you are able to access at any given time. Drawing your money down tax-efficiently can be challenging without professional advice. A planner can help you structure your withdrawals across your pensions, ISAs, and other investments to minimise your tax liability and ensure you don’t accidentally push yourself into a higher tax bracket. 

3. Behaviour, coaching, and peace of mind 

A planner can also help you cope with the psychological side of finances. When markets experience a downturn, or when the government changes pension legislation, online articles often stoke panic or provide conflicting theories about what to do. 

There is a profound difference between accessing information and receiving advice. Evidence shows that the 20% choosing to partner with a regulated financial planner enter retirement significantly better prepared.

A planner can help prevent you from making emotional, short-term decisions that could permanently damage your long-term wealth. 

Make the move from guidance to certainty 

There is inherently nothing wrong with using the internet to educate yourself on the basics of retirement planning and finances as a whole. However, when it’s time to turn concepts into action, qualified and regulated advice is key. 

Don’t leave your financial future to an algorithm. Let us help you build a retirement plan you can rely on. 

Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you. 

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate tax planning.