Some 8m people are planning a DIY approach to retirement and planning to avoid professional financial advice but admit they do not know how to avoid running out of money in retirement, according to a new study.

The LV= Wealth and Wellbeing Monitor says despite the risks many are reluctant to take financial advice.

The LV= Wealth and Wellbeing Monitor is a quarterly survey of 4,000+ UK adults.

The latest survey found that:

• One on five (22%) of those planning to retire in the next five years know nothing about product options at retirement
• 35% (10m) of pension holders know nothing about how stock market falls can affect retirement saving
• 34% (9.9m) say they do not know how to ensure they do not run out of money in retirement

Only 34% of married people said they understood how to ensure their spouse will be left with enough pension if they die, says LV=. The survey backs up other recent studies suggesting widespread ignorance of the pension options available.

Despite being in the dark, only 39% (10.6m) of pension holders are planning to take financial advice when they retire with 31% (8.3m) planning a DIY retirement plan. 

Only half (52%) of mass affluent people – those with assets of between £100,000 and £500,000 excluding property – said they were planning to take financial advice.

Fewer than a third 31% (16m) of UK adults think people should see a financial adviser when deciding how to access pensions at retirement. 

The survey found that nearly half (46%) of non-advised, mass affluent people believed they could can make financial decisions on their own with 27% of mass affluent customers unwilling to pay for financial advice and 20% saying financial advice was too expensive. A quarter  of people do not think financial advice offers good value for money.

The top occasions where mass affluent consumers feel that people should seek financial advice are: Choosing to invest a large lump sum (43%), inheritance tax planning (44%) and deciding how to access a pension (40%).

Clive Bolton, managing director of savings and retirement at LV=, said: “Taking financial advice is an excellent idea because it compensates for the emotional biases people have when they make big financial decisions. A DIY approach to managing large pension funds at retirement is fraught with risk. 

“People can easily buy the wrong products, incur unnecessary tax bills or simply exhaust their retirement funds too quickly but an adviser will provide an impartial, cool-headed approach to their client’s finances and offer solutions that the client will not even have considered.”