Regularly seeking financial advice on a pension plan can make a significant difference on how much any individual accumulates over his/her working life, recent research by Old Mutual Wealth has revealed.

Regularly seeking financial advice on a pension plan can make a significant difference on how much any individual accumulates over their working life, recent research by Old Mutual Wealth says.

Data shows that those who use an advisor on a "regular basis" to plan their future and set financial targets have an average annual retirement income of £26,000 ($40,600) versus the overall average of £19,000. This may not sound like much, but over a 21-year period that is an additional income of £147,000.

Since the Retail Distribution Review reforms came into force in 2013, forcing advisors to be more transparent on fees and end trail commissions, advisors must work harder to justify their fees and persuade investors they are value for money.

The survey also found that people currently in retirement who have visited a financial advisor on at least one occasion are 35 per cent more likely to be satisfied with their income than those who didn’t.

“Thinking about where your income is going to come from and having a target in mind clearly makes a difference to your outcome in retirement. So does seeking financial advice. More people yet to retire are setting goals that will make them better off in retirement, and our study clearly shows that advice pays,” said Carlton Hood, customer director at Old Mutual Wealth.

Not taking advice can mean people retire with less money than they had hoped for. Those already in retirement have an average income of £19,000, which is 42 per cent of their pre-retirement income level. The average target income is £23,700 per annum meaning there is a £4,700 (25 per cent) income gap between expectation and reality, the study adds.

Of course the study must be taken with a pinch of salt as there is greater value being placed on other forms of investing by retirees these days, rather than solely pensions. For instance, the data shows those approaching retirement who have access to a final salary scheme are actually 25 per cent less dependent on those schemes as an income source compared to those already in retirement.

Expected reliance on other forms of pensions such as money purchase and the state pension is also down with some of the slack being picked up by other forms of investment such as ISAs, savings and investments and property.

The sample consisted of 1,536 UK adults aged between the ages of 50 and 75.