What's the difference between advice and guidance?

Harriet Meyer / 08 June 2016

If you're looking for advice and information on pensions or your finances, it's important to know the difference between guidance and advice.



A growing number of services are on offer to help guide prospective retirees through the retirement maze.

This follows the introduction of pension freedoms in April 2015, enabling retirees to spend their lifetime savings as they wish. 

While welcomed by many, this leaves a baffling range of options, from investing for income, a traditional annuity or continuing to save.

It’s tricky to know how to manage producing an income for the rest of your life, so where do you start?

Not sure if your pension is performing as it should? Read our guide to reviewing your pensions.

Free guidance

There is free guidance available, set up by the government. What form this will take in the future remains to be seen. 

The Chancellor said in the Budget 2016 that the Money Advice Service (MAS), the Pensions Advisory Service and Pension Wise will be restructured.

These services can be useful, and offer a steer on your options. 

At present you can still register your interest to speak to someone at Pension Wise. You may have a telephone chat or short face-to-face meeting to discuss what is available to you.

Confused by the new flat-rate state pension? Read Paul Lewis' guide.

Full advice

If you have relatively simple affairs and sound financial knowledge, using online services and basic guidance may be all your need.

However, beware that the services above are far removed from full-blown advice. They cannot offer in-depth analysis of your financial situation, or offer product recommendations.

Using any of the guidance services on offer will only provide basic advice. They cannot tell you whether you should opt for income drawdown in retirement, say, or transfer your pension.

Is a financial adviser really worth the cost?

Seeking an adviser

Full-blown advice costs several hundred pounds an hour – and can cost as much as thousands of pounds, depending on what actions you take. However, if your affairs are more complex it should ideally save you more than you spend.

An adviser could, for example, highlight valuable guarantees on pensions policies. Or they might flag hefty exit fees on with-profits policies that you might be unaware of. A small misunderstanding of your financial situation could cost you dear in the long-term.

In short, an adviser will take into account all aspects of your life and finances to work out a detailed plan with you. But where do you find one?

Websites such as unbiased.co.uk and vouchedfor.co.uk are a good place to start if you’re looking for a financial adviser. You can also search for an adviser through the Personal Finance Society at thepfs.org/membership/findanadviser

For more tips and useful information, browse our money articles.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.