Low Earners Get Less Financial Advice

People on low incomes are not getting as much financial advice as their wealthier counterparts, a new report claims.

Research commissioned by the Department for Work and Pensions (DWP) found that independent financial advisors (IFAs) and financial intermediaries (FIs) dealt mainly with richer clients who could afford to pay higher commissions.

The report says that whilst low earners are less inclined to consult financial experts in the first place, many financial advisors pass them over in favour of those who can pay more.

But those on low incomes also fail to arrange free consultations with organisations like the Citizens' Advice Bureau, because they have little belief in centralised savings accounts - including the state pension.

"There is clearly a gap in the provision of advice on pensions and retirement planning to people on lower incomes," the report says.

"Most advice in this area is given through IFAs, but it is unrealistic to expect them to expand their work with people on low or moderate incomes.

"Few people with lower incomes would be willing to pay for fee-based advice and the levels of commission payable on small pension contributions mean that IFAs can earn little from advising them."
More than a third of Brits in full-time employment do not put money into their pension scheme, meaning the lower their income, the less likely workers are to save, say experts.