Pensions

If you've started looking into pension advice, you've probably come across two very different types of help: free guidance and paid, regulated advice. They sound similar, but mixing them up can mean paying for something you didn't need, or missing advice you actually did.

Guidance, from services like MoneyHelper and its Pension Wise appointments, is impartial and covers your options in general terms. It won't tell you what to do with your specific pension, and there's no charge to book an appointment - it's a government-backed service. You can reach MoneyHelper on 0800 138 7777 if you'd rather talk it through on the phone, including if you're feeling unsure or vulnerable about a decision.

Pension advice, on the other hand, is a personal recommendation from an advisor authorised by the Financial Conduct Authority. They'll look at your full circumstances, your goals, and your tax position, then give you a specific recommendation and explain why. This comes at a cost, which we'll break down later in this guide.

Neither option is automatically better than the other - they answer different questions. Guidance is a sensible starting point for almost anyone, and it can be enough on its own if your situation is straightforward. Advice becomes more valuable as your circumstances get more complex, or when the cost of getting a decision wrong is high enough that a personal recommendation is worth paying for.

Here's how the two compare side by side:

For some people, yes. For others, free guidance covers everything they need. It usually comes down to how complicated your situation is and how much is at stake if you get a decision wrong.

Advice tends to earn its fee when there's real complexity or risk involved: several pension pots from different jobs, a defined benefit transfer offer, a large pot where the timing of tax-free cash matters, or a drawdown strategy that needs to last decades. In these cases, a mistake can be expensive and hard to reverse, so a personal recommendation can pay for itself several times over.

Guidance is often enough if you have one straightforward pension, want to understand your options before making up your mind, or just need a clearer picture of what's available to you. A Pension Wise appointment, arranged through MoneyHelper, is a sensible first step in almost every case, even if you go on to pay for advice afterwards.

Pension advice fees vary between advisors and depend on how complex your situation is, so there's no single answer to how much does pension advice cost. Advisors typically charge in one of a few ways, and the figures below are illustrative only - always ask for a personalised quote before agreeing to anything.

It's also worth understanding the difference between an initial advice fee, charged for the first piece of advice and any recommendation, and an ongoing advice fee, charged each year for continued reviews and support. You don't have to take ongoing advice just because you paid for an initial recommendation.

Cost generally rises with complexity. A single, straightforward pension review tends to sit at the lower end of any fee range, while a defined benefit transfer, a consolidation of several pots, or an ongoing drawdown strategy usually costs more, simply because the advisor is doing more analysis and taking on more responsibility for getting the recommendation right. It's reasonable to ask an advisor to explain why a particular case costs what it does, and to compare that against at least one other advisor's quote before deciding.

Advisors authorised by the Financial Conduct Authority are required to set out their fees in cash terms before you commit to any work, meaning there's no reason to be left guessing what something will cost.

There isn't one single best person to talk to about pensions - it depends on what you need. Here are the four main routes, roughly in order of how far they can help.

The right pension advice depends heavily on the type of pension, or pensions, you have. Here's how advice typically differs across the most common situations.

Workplace pension advice

Workplace pensions are set up through auto-enrolment, with minimum contributions from you and your employer, and often a salary sacrifice option that can reduce the tax and National Insurance you pay on your contributions. Advice here usually focuses on whether you're contributing enough for the retirement you want, whether salary sacrifice makes sense for your income, and how your workplace pension fits alongside any other pots you hold from previous jobs. Because employer contributions are effectively free money toward your retirement, reducing them below the matched minimum is rarely a good starting point, whatever else you decide to do.

Personal pension and SIPP advice

A self-invested personal pension (SIPP) gives you more control over where your money is invested, choosing from a wider range of funds, shares, and other assets than most workplace schemes offer, but that flexibility comes with more responsibility for the decisions you make. Advice for personal pensions and SIPPs typically covers fund choice, the level of investment risk you're comfortable with, ongoing charges, and whether the extra control is actually worth the extra complexity for your circumstances, rather than a simpler, more managed alternative.

Defined benefit (final salary) transfer advice

A defined benefit, or final salary, pension pays a guaranteed income for life. Transferring it out gives you a cash value instead, which you then have to manage yourself, and that guaranteed income is usually hard or impossible to get back once it's gone. Because of this, regulated defined benefit transfer advice is a legal requirement for transfers above a £30,000 value, a safeguard set by the Financial Conduct Authority. Most people who transfer out end up worse off in retirement than if they'd stayed put, which is exactly why this advice requirement exists.

Retirement advice: drawdown vs. annuity

When you're ready to take an income, the two main routes are drawdown, where your pot stays invested and you draw money flexibly, and an annuity, which converts your pot into a guaranteed income for life. Drawdown offers more flexibility but the income isn't guaranteed and the value of your pot can fall as well as rise, while an annuity trades that flexibility for certainty. Our guide to drawdown vs annuity covers both in more detail, including how the timing of tax-free cash affects each option. Some people also look at equity release as an alternative or supplement to pension income in later life. This is a lifetime mortgage secured against your home, so it needs separate specialist advice - plans that meet Equity Release Council standards come with certain safeguards, but your home may still be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

The 4% rule is a rule of thumb suggesting that if you withdraw around 4% of your pension pot in the first year of retirement, then adjust that amount for inflation each year after, your money has historically had a reasonable chance of lasting 30 years. It's a starting point for thinking about drawdown, not a guarantee.

The rule originated from US research into historical stock and bond market returns, and UK advisors generally treat it as a rough guide rather than a formula to rely on directly. Sequencing risk (poor investment returns early in retirement), how long you live, and changing market conditions can all mean 4% is too high, or in some cases too conservative, for your own situation.

As an illustrative example only: a £300,000 pension pot at a 4% withdrawal rate would give a starting income of around £12,000 a year, before tax, with that amount then adjusted for inflation in later years. This is a simple example to show how the maths works, not a recommendation - pension income isn't guaranteed, and the value of your pot can fall as well as rise.

Pension scams and poor advice both cause real, lasting harm, so it's worth taking a few minutes to check anyone you're considering paying before you hand over any pension details. You can search any advisor or firm on the Financial Conduct Authority Register in a couple of minutes, free of charge.

A good advisor should be happy to answer all of these clearly, before you agree to anything. If they're evasive about any of them, treat that as a warning sign.

Martin Lewis, founder of MoneySavingExpert, doesn't provide personal pension advice himself, but his published consumer guidance on pensions is widely followed, and a few themes come up consistently.

He commonly encourages people to book a Pension Wise appointment through MoneyHelper before paying for advice, particularly for smaller or simpler pots, since it doesn't cost anything to access and can answer many questions on its own. He's also repeatedly warned about pension scams, especially unsolicited calls or offers to "unlock" a pension early, and has cautioned that consolidating pensions isn't automatically a good idea, since some older pensions carry valuable guarantees or benefits that would be lost by moving them.

His broader position is that paid advice isn't always worth it for small, simple pots, but it becomes more valuable as your situation gets more complex, such as a defined benefit transfer or several pensions to bring together. This guide reflects the same general approach, rather than any endorsement of Money Saving Advisors specifically.

Consolidating small pension pots

Most people build up several pensions over their working life, one from each employer, and bringing them together can make them easier to manage and review. But consolidating your pensions isn't automatically the right move - some older schemes carry valuable guarantees, lower charges, or exit penalties that are worth checking before you combine anything.

Pensions and inheritance tax changes

Under current government plans, most unused pension funds are set to become part of your estate for inheritance tax purposes from April 2027, a significant change from the current rules. This affects pensions and inheritance tax planning for anyone with a larger pension pot, and it's worth reviewing how it fits alongside your wider estate planning, since the rules are still being finalised and may change before they take effect.

Pensions and divorce

Pensions are often one of the most valuable assets in a divorce, and dividing them fairly usually needs specialist input alongside your solicitor. A pension sharing order can split a pot between both parties, but valuing pensions correctly (especially defined benefit schemes) is technical, and specialist advice helps avoid one party losing out simply because a pension was harder to value than other assets.

Money Saving Advisors connects you with regulated advisors who can compare a wide range of options for your pension, rather than pointing you toward a single provider. The first conversation is a fact-find, not a sales pitch - it's there to understand your circumstances so you can decide what to do next, with no pressure to proceed.

Whether you're weighing up a defined benefit transfer, trying to work out drawdown vs. annuity, thinking about consolidating pensions, or considering equity release as an alternative source of later-life income, an advisor can talk through the options in plain English and set out any fees clearly before you commit to anything. Remember that equity release is a lifetime mortgage, and your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

If you're not ready to pay for advice yet, that's fine - MoneyHelper (moneyhelper.org.uk, 0800 138 7777) offers impartial guidance at no cost, and is a sensible first step for almost anyone.