Share of pension pots accessed with advice falls to lowest level in six years

Only 31% of the 962,000 pension plans accessed for the first time in 2024-25 were taken after receiving regulated advice, according to the latest release of the Financial Conduct Authority's retirement income market data¹. The proportion of customers taking advice has now fallen for six years in a row¹.

Around 350,000 new pension drawdown plans were taken out in 2024-25, and only 45% of schemes were set up after receiving advice, compared with 66% of drawdown policies in 2018-19¹. Across all pensions accessed, nearly six in 10 are taken without any professional advice or guidance at all¹.

Take-up of the government-backed Pension Wise service, which offers face-to-face appointments at Citizens Advice offices or by telephone or online to over-50s with a defined contribution pension, also remains low. In 2024-25, just under 11% of pensions were accessed after a Pension Wise appointment, around 103,500 pots in total¹.

The FCA's 2024 Financial Lives survey found that 75% of over-45s do not have a clear plan for how to take money from their pension, or did not realise they had to make a choice¹. The FCA puts the average initial charge of advice at 2.4% of the amount invested, with ongoing fees of around 0.8%¹.

Why it matters for households

The figures cover the 962,000 pension plans first accessed in 2024-25, including the roughly 350,000 new drawdown plans opened in the year¹. Most people reaching this point are making decisions without regulated advice or free guidance, at a stage when choices about how to take money from a pension are difficult to reverse.

All retirement income is subject to income tax, whether it comes from drawdown, annuity payments, defined benefit plans or fully cashed-in pensions¹. The exception is the initial tax-free lump sum, also called the pension commencement lump sum, of up to 25% of a pot, with total tax-free cash capped at £268,275 for most people¹.

What happens next

The FCA has proposed a new type of help called targeted support, which would allow firms to make suggestions to groups of consumers with similar characteristics, such as those not saving enough for retirement¹. Firms would be allowed to offer this support for free but could charge for it¹. A launch date of March 2026 is scheduled, and the FCA says it aims to finalise its new rules by the end of 2025¹.

Separate plans for "simplified advice" would provide individualised advice focused on a single, straightforward consumer need, without requiring a full assessment of circumstances and delivered at a relatively low cost¹.