Guidance vs advice
In brief: In the UK, there is a legal distinction between financial guidance and financial advice. Guidance means general education and information — anyone can provide it. Advice means a personal recommendation tailored to your circumstances — only FCA-regulated advisers can provide it. Understanding this distinction helps you know what kind of help you are getting and what protections apply.
What is guidance?
Guidance is general information about financial products, concepts, and rules. It helps you understand your options without telling you what to do. Examples include:
- Explaining how pension drawdown works
- Showing how different tax bands affect your income
- Describing the pros and cons of ISAs versus SIPPs
- Modelling different retirement scenarios based on assumptions you choose
Guidance is educational. It presents facts, calculations, and options. It does not assess your personal circumstances or tell you which option is right for you. Under the Financial Conduct Authority's rules (PERG 8.24), guidance is not a regulated activity — meaning it can be provided by anyone, not just authorised firms.
What is advice?
Financial advice is a personal recommendation. It takes into account your specific circumstances — your income, assets, debts, goals, health, family situation, and risk tolerance — and tells you what you should do. For example:
- "You should transfer your DB pension to a SIPP"
- "You should draw from your ISA before your pension"
- "You should invest 60% in equities and 40% in bonds"
Regulated financial advice can only be provided by firms and individuals authorised by the Financial Conduct Authority. When you receive regulated advice, you have access to the Financial Ombudsman Service and the Financial Services Compensation Scheme if something goes wrong.
The regulators
Three main bodies oversee pensions and finances in the UK.
Financial Conduct Authority (FCA)
The FCA regulates financial advisers, investment platforms, pension providers, and other financial services firms. It sets the rules on what firms can and cannot do, and it maintains the Financial Services Register where you can check whether a firm or individual is authorised. If you receive bad advice from an FCA-regulated adviser, you can complain to the Financial Ombudsman.
HM Revenue and Customs (HMRC)
HMRC is responsible for the UK tax system. It sets and collects income tax, Capital Gains Tax, Inheritance Tax, and National Insurance contributions. HMRC also administers tax relief on pension contributions and determines the rules around tax-free allowances. When you see figures like the Personal Allowance (£12,570) or the annual pension contribution limit (£60,000), these are HMRC rules.
The Pensions Regulator (TPR)
TPR oversees workplace pension schemes and ensures employers meet their auto-enrolment duties. It protects members of defined benefit schemes and can intervene when schemes are at risk. TPR does not regulate individual financial advisers — that is the FCA's role.
Free help
Several organisations provide free, impartial guidance on pensions and finances.
Pension Wise
Pension Wise is a government service offering free, impartial guidance to anyone aged 50 or over with a defined contribution pension. A Pension Wise appointment (available by phone, online, or face-to-face) covers your pension options, the tax implications of each, and how to avoid scams. You can book at gov.uk/pension-wise. This is one of the most valuable free services available and is well worth using before making any decisions about your pension.
MoneyHelper
MoneyHelper (formerly the Money Advice Service and TPAS) provides free guidance on all areas of personal finance — pensions, savings, debt, insurance, and retirement. It offers online tools, guides, and a helpline. MoneyHelper is backed by the government and is impartial.
Citizens Advice
Citizens Advice provides free help with debt, benefits, employment rights, and general money issues. While not pension specialists, they can help with broader financial problems that affect your retirement planning.
Paid help — financial advisers
What a financial adviser does
An independent financial adviser (IFA) assesses your full financial picture and makes personal recommendations. This might include which pension to draw from first, how to structure your income for tax efficiency, whether to transfer a defined benefit pension, how to pass on wealth to your family, and what level of investment risk is appropriate for your situation.
How to find one
The FCA maintains a register of authorised firms and individuals at register.fca.org.uk. You can also use services like unbiased.co.uk or vouchedfor.co.uk to find rated advisers in your area.
Typical costs
Financial advice is not cheap, which is partly why the "advice gap" exists. Typical costs are:
- Initial advice: £500 to £1,500 for a comprehensive review and recommendation
- Ongoing advice: 0.5% to 1% of your portfolio value per year for continued management and annual reviews
Some advisers offer fixed fees, others charge a percentage, and some offer one-off consultations without ongoing commitment. Always ask for a clear fee schedule before engaging an adviser.
When it is worth it
Paid advice tends to be most valuable in situations where the stakes are high or the rules are complex:
- Defined benefit pension transfers — for pots over £30,000, regulated advice is legally required. The decision is irreversible and complex.
- Large pension pots — if your combined pensions exceed the Lump Sum and Death Benefit Allowance (£1,073,100), specialist advice on tax treatment is valuable.
- Complex tax situations — multiple income sources, rental property, business ownership, or cross-border tax issues.
- Inheritance planning — structuring your estate to minimise Inheritance Tax and ensure your wishes are met.
- Health or capacity concerns — if declining health means decisions need to be made now for the long term.
Where FutureClear fits
FutureClear is a retirement modelling tool, not a financial adviser. It provides guidance by showing you the numbers — it does not tell you what to do.
This means FutureClear works well in several contexts:
- Before seeing an adviser — model your income, spending, and assets so you arrive at your adviser meeting with a clear picture. You can use the projections as a starting point for the conversation, which makes the meeting more productive and may reduce the time (and cost) of the engagement.
- Alongside advice — if an adviser recommends a particular approach (such as delaying pension drawdown until State Pension starts), you can model that scenario and see the year-by-year impact for yourself.
- Independently — many self-directed investors are confident making their own decisions but want to see the long-term projections. A modelling tool lets you test different assumptions, compare scenarios, and understand how your choices interact over time.
FutureClear is not a replacement for personalised advice on complex situations like DB pension transfers, tax structuring for business owners, or estate planning. For those situations, a qualified financial adviser brings expertise and regulatory protections that a modelling tool cannot provide.
These projections are for modelling purposes only. They do not constitute financial advice. Tax rules are subject to change. Please consult a qualified financial adviser before making financial decisions.