The advice gap is well known. The FCA estimates that around 23 million adults are underserved by the markets for advice and guidance, including about seven million with at least £10,000 in liquid assets.1
The newest retirement data adds a sharper point. It is less about whether advice exists and more about whether people use any help at all.
What the data says
In 2025/26, 1,047,008 pension plans were accessed for the first time, up 7.4%. The value withdrawn rose 21.7% to £91.2 billion. Only 30.8% of those plans were accessed with regulated advice, broadly unchanged from 30.4% a year earlier.2
Full cash withdrawal remained the most common choice, at 45.8% of plans. Plans entering drawdown rose 10.5% to 401,137. Pots worth £250,000 or more were 8.6% of those accessed, up from 7.2%.2
Which? reports that 320,762 pensions were accessed at an annual rate above 8%.3 That is a high rate to draw from an invested pot, and the pound cost ravaging article in this series explains why it matters.
So the question is a fair one. Is the problem simply that there is not enough advice? Or is it also how people engage with the retirement market?
What the FCA is doing
- Targeted support has been available since April 2026. It lets firms make suggestions to groups of people with common characteristics.4
- In March 2026 the FCA proposed changes to make simplified advice easier for firms to give.5
- In July 2026 it reviewed legacy unit-linked pensions. It found that many deliver fair value, but some customers in older products receive poorer value, often because of older design, layered charges and weak firm data.6
The direction is clear. The industry needs more ways to support people who sit between doing nothing and paying for comprehensive advice.
Technology is not the answer on its own
A digital journey can make something quicker. An API can remove re-keying. Automation can cut manual work. Data can sharpen segmentation. None of those, alone, helps a customer decide.
Picture someone approaching retirement. They have several pots and no clear figure for the income they need. They are unsure how drawdown differs from an annuity. They have savings outside the pension, perhaps a mortgage, perhaps adult children to help, perhaps a worry about care costs. Giving them more information does not make the decision easier.
Think about the journey, not the product
Five questions help.
- What does the customer need to understand?
- What does the provider already know about them?
- What can technology do, and where is a person needed?
- At what point does regulated advice become the right step?
- What happens when the customer does nothing?
The last one is the one most often missed. A good digital journey does not stop at clicks, completion rates and conversion. It asks whether the customer reached an appropriate outcome. That is the Consumer Duty test, and the FCA's July 2026 work on legacy products shows it applies to older customers who never complained.
Five ways to help, in plain terms
I find it useful to sort each step of a retirement journey into one of five modes.
| Mode | What it means | Example |
|---|---|---|
| Digital | The customer does it alone, online | Checking a pension balance |
| Guided | Free, generic help | MoneyHelper, Pension Wise |
| Targeted | Ready-made suggestions for a group | A message to people near their retirement date |
| Advised | A personal recommendation | Choosing income across several pots and assets |
| Automated | The system acts on a rule | Moving a dormant pot with a clear consent trail |
The most effective firms will connect the five rather than treating them as separate products. A client might start digital, move to targeted, and need advice at the point the numbers get big.
What I would ask your team this week
- How many of your customers reach retirement without any help from you?
- Where does your journey ask a customer to choose between options they cannot compare?
- If the customer does nothing, what happens, and who notices?
- Do your outcome measures include whether the customer understood, not just whether they completed?
There is a commercial opportunity here, and a responsibility. If technology makes a financial decision easier to reach but harder to understand, the industry has not solved the problem. If it makes the process simpler while improving understanding and outcomes, it has.
The advice gap is real. The bigger prize may be a retirement market where more people get the right level of support at the right moment.
| Sea to Sea Consulting Limited Independent, specialist commercial support for retirement-income, later-life lending, care-funding and intermediary distribution markets. To talk it through: enquiries@seatoseaconsulting.co.uk |
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Key terms
| Advice gap — The difference between the number of people who could benefit from advice and the number who get it. Targeted support — A regulated service where firms make ready-made suggestions to groups with shared characteristics. Simplified advice — Regulated advice on a narrower need or decision, rather than a person's whole financial position. Consumer Duty — FCA rules requiring firms to deliver good outcomes for retail customers. Full encashment — Taking an entire pension pot as cash. Decumulation — The stage when people use their savings to provide retirement income. |
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Notes
1. FCA via Investment Executive, FCA tackles U.K.'s large advice gap, 2025
2. FCA, Retirement income market data 2025/26, Sep 2026
3. Which?, Pension withdrawals surge to £91 billion, Sep 2026
4. FCA, Regulatory Priorities: Pensions, Mar 2026
5. FCA, FCA plans to help people get more financial advice for important decisions, 25 Mar 2026
6. FCA, Pension firms must do more for customers in older pensions and fund savings, 2 Jul 2026
References
FCA, Retirement income market data 2025/26, 24 Sep 2026. fca.org.uk/data/retirement-income-market-data-2025-26. Accessed 9 Nov 2026.
Investment Executive, FCA tackles U.K.'s large advice gap, 2025 (reporting the FCA policy statement). investmentexecutive.com. Accessed 9 Nov 2026.
Which?, Pension withdrawals surge to £91 billion, 29 Sep 2026. which.co.uk. Accessed 9 Nov 2026. Secondary reporting of FCA data.
FCA, Regulatory Priorities: Pensions, Mar 2026. fca.org.uk/publication/regulatory-priorities/pensions-report.pdf. Accessed 9 Nov 2026.
FCA, FCA plans to help people get more financial advice for important decisions, 25 Mar 2026. fca.org.uk. Accessed 9 Nov 2026.
FCA, Pension firms must do more for customers in older pensions and fund savings, 2 Jul 2026. fca.org.uk/news/press-releases/pension-firms-must-do-more-customers-older-pensions-fund-savings. Accessed 9 Nov 2026.
Sea to Sea Consulting Limited is not authorised or regulated by the Financial Conduct Authority. This article is general information, not personal or financial advice. Views are those of Sea to Sea Consulting Limited.