How much does pension advice cost?

Ollie Bryden | 10/10/2019



Getting professional pension advice can mean the difference between enjoying a comfortable retirement or just getting by. That might sound dramatic, but good advice can really pay off, providing peace of mind that your pension savings are working as hard as they can – and that they won’t run out too soon once you reach retirement (here more on how you can be better off with pension advice).

Yet thousands of people every year access their pensions without having taken any advice first. Latest data from the Financial Conduct Authority (FCA) reveals that in the year to the end of March, nearly half (48%) of pension plans were accessed without regulated advice being taken, as reported in the Financial Times. Here, we explain exactly how much pension advice is likely to set you back, and its real value.

How much will I pay for pension advice?

The amount you’ll pay for pension advice will vary depending on the charging structure of the adviser you’ve chosen. For example, some pension advisers will charge a percentage of the value of your retirement savings, whilst others will charge an hourly rate, or a set fee.

According to research by consumer association Which?, the majority of advisers charge an upfront fee which is calculated as a percentage of the amount to be invested, with an average fee of 2.7%. Which? asked over 100 advisers how much they’d charge based on a range of different pension scenarios. The average cost for transferring multiple pensions worth £150,000 into a single plan amounted to £2,897, whilst retirement advice on a pension worth £100,000 cost an average of £1,837.

Before getting pension advice, always make sure you’re clear exactly how much you’re going to have to pay. You can see a full breakdown of our charges here. You must also check that any adviser you’re planning to use is properly regulated and authorised by the FCA. Search the Financial Services Register to see whether a company is regulated.

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What's the value of pension advice?

Getting advice on the best ways to maximise your retirement savings could leave you much better off when you eventually stop work.

According to the Value of Advice report by, the trade body for financial advisers, those who took advice on their pensions at the age of 25 saved an average of £34,300 more than those who didn’t take advice. This figure does not include tax relief or interest. Those who sought advice later in their careers at the age of 35 saved an average of £25,730 more than those who didn’t receive any advice. Separate research by the International Longevity Centre found that affluent people who’d received advice on their pension earned £880 more a year in pension income than those in this group who hadn’t. Similarly, those who were ‘just getting by’ but had sought financial advice, earned £713 more a year in pension income and increased their total pension wealth by £25,859.

What can an adviser help me with?

A good financial adviser should be able to talk you through all aspects of retirement planning, including how much you should be saving, and whether or not you should transfer any of your pensions.

For example, if you’ve got several different pensions which you find difficult to keep track of, an adviser can recommend whether or not you would be better off consolidating these into one plan, or whether you shouldn’t do this because you could lose valuable benefits.

They can also let you know whether the funds your pension savings are invested in are appropriate for your needs, or whether you may want to consider different funds. Find out more about why advice matters in our blog on the benefits of pension advice.

What if I'm very close to retiring - do I still need pension advice?

This is arguably one of the most crucial times to seek pension advice, as it’s vital to make sure you don’t run out of money too soon in retirement.

The main ways to take an income from your pension at retirement are annuities and drawdown. With an annuity, you’re essentially buying guaranteed income for life. Drawdown, however, can provide greater flexibility, as you leave your retirement savings invested and then take an income from them as and when you need it. Read more on the pros and cons of these two products in our blog Drawdown vs Annuity.

The route you choose, or whether you decide to go for a combination of the two, will depend on your individual circumstances. If you’re not sure, an adviser can recommend the best option for you based on your income requirements.

What if I can't afford pension advice?

Many people believe they simply cannot afford professional financial advice. How you pay for pension advice differs to other forms of financial advice. This is because if the advice is to do with a pension transfer (switching your pension to another provider), then all of the up front and/or ongoing advice cost can be deducted directly from your pension, up to any limit. Nothing will come out your pocket directly.

You also might be able to take some money from your pension to help cover the cost of pensions advice (which isn't related to a pension transfer) through the Pension Advice Allowance. This enables you to take up to £500 from your defined contribution pension up to three times in your lifetime to put towards the cost of retirement financial advice.

You can use the Pension Advice Allowance at any age, but only once in any tax year. It can only be used to pay for regulated retirement financial advice. Find out more about how the Allowance works in our blog The Pension Advice Allowance explained.

Can I get free pension advice?

The Government's Pension Wise service, a joint enterprise with the Pensions Advisory Service and Citizens Advice, provides those approaching retirement with free guidance on their pension choices either face-to-face or over the telephone. Remember, however, that guidance is not the same as advice, so if you want advice that is specifically tailored to your individual circumstances, or to be recommended a course of action to take, you’ll need to speak to a financial adviser.

Simply sign up online and we'll do all the hard work for you.