Do you care that ‘pension dippers’ don’t want you?

I never cease to be amazed that people will happily pay for advice on relatively small decisions. They pay commission to travel agents for holidays. They buy Which? when they need a new kettle. But when it comes to their pension, often the biggest pot of money they will ever control, many decide they can fly solo.

New data from the regulator suggests that fewer people are using regulated financial advice when accessing their pension. That should worry anyone who cares about retirement outcomes.

The Financial Conduct Authority’s Retirement Income Market Data shows a 9 per cent rise in pensions accessed last year, taking the total to 961,575. Much of that increase was driven by a 25 per cent rise in drawdown plans, which reached almost 350,000.

And yet, of the 962,000 pension plans accessed in 2024–25, fewer than a third, just 31 per cent, were taken after receiving regulated advice.

The most concerning trend sits within drawdown. Six years ago, around two thirds of people entering drawdown did so with advice. Today, that figure has fallen to less than half.

Of the 350,000 drawdown plans accessed for the first time, only 45 per cent were taken with advice. In 2018–19, that figure was 66 per cent. The direction of travel has been consistent, and it is not encouraging.

Advisers will recognise why this matters. Drawdown is not just another box to tick. It involves decisions about tax-free cash, withdrawal rates, investment strategy, sequencing risk and longevity. Get any of these wrong and the consequences tend to show up quietly, several years later, when it is harder to fix.

Stephen Lowe, group communications director at Just Group, describes the trend as a warning sign.

“The downward trend in use of advice for drawdown should be seen as a red flag,” he says. “Customers need to go into drawdown with their eyes open about managing withdrawals, investment risk and longevity risk.”

Understanding those risks, he adds, improves the chances that retirement savings will last as long as they need to.

The government’s Pension Wise service is well regarded by those who use it. But it is not filling the gap left by people choosing not to take regulated advice.

Only 11 per cent of pension pots accessed were taken after using Pension Wise. In other words, most people are doing neither.

“Regulators said they would uncover better stimulus, incentives and processes to ensure more pension savers benefit from Pension Wise,” Lowe says. “This data confirms no progress has been achieved.”

Nearly six in ten pensions are now accessed without either professional advice or guidance. That is not a niche issue. It is the mainstream.

This is where the uncomfortable question for advisers arises.

Millions more people could potentially be supported through targeted support, particularly those drawing down unsustainably, under-saving for retirement, or sitting on large cash balances without a plan.

The industry is already developing new models to bridge the gap between full advice and no help at all.

“In the future, targeted support options may help more savers,” Lowe says.

But targeted support is not just a regulatory development. It is a business decision.

Advisers may want to start by asking themselves a few honest questions.

• Do you want to help ‘pension dippers’, or are you comfortable letting them self-direct?

• Could your business cope with higher volumes and lower margins?

• What risks would targeted support introduce to your existing advice model?

• And crucially, what problem are you actually trying to solve?

Not every adviser needs to serve every client type. But the steady rise of unsupported retirement decisions suggests the gap between advice and no advice is not closing on its own.

The real question may not be whether pension dippers want advisers. It may be whether advisers want to meet them halfway.

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