Metis AM
From cooking and DIY to holidays and restaurants, you can find advice for almost anything online.
While there is no harm in trying out a new recipe or restaurant, acting on financial advice found on the internet might be riskier.
Doing your own research can be a great starting point if you’re hoping to be more hands-on about managing your pension or other areas of your finances. However, acting on this information alone, without seeking regulated advice, might mean you are making decisions without seeing the bigger picture.
MoneyAge reports that over 80% of consumers are seeking pension guidance from unregulated sources such as AI tools and social media influencers, with 48% of survey respondents specifically looking for pension support.
Read on to learn why taking online financial guidance could be useful at times but falls short compared to working with a financial planner.
There are benefits to learning about your pension online
While there are dangers to taking online advice – which we will explore later – there is no harm in learning about your pension online, especially if you seek out trusted sources.
For example, you could visit your pension provider’s website to learn more about:
- How tax relief works
- How much your pension could be worth in 10, 20, or 30 years’ time
- The benefits of increasing your contributions, even by a small amount
- The pros and cons of consolidating your workplace pensions
- Whether you can pay into a pension on behalf of a child or spouse.
You could also ask an AI tool like Claude or ChatGPT to explain these concepts to you through helpful examples, though be aware that not all information produced on these sites is accurate.
Certainly, educating yourself on your pension and what you can do with it is a useful starting point. Just remember to stick to trustworthy sources, rather than social media (for reasons that may become clear later).
That said, most of what you’ll find online is generic advice that is not tailored to your situation. Working in tandem with a financial planner could be a better option for you and your wealth.
Not only can a financial planner be there to support you through the various stages of your life, but they can help to protect you from inaccurate online information – of which there is plenty, unfortunately.
Here are some ways that information online may be misleading and why it’s usually best to take professional advice.
Online financial insights may be based on incorrect or irrelevant information
In general, social media influencers and AI tools are skilled at delivering information convincingly and with confidence. Influencers may present themselves as successful financial experts, while AI outputs are often expressed as facts.
On this matter, the research cited by MoneyAge included a study of the quality of financial information generated by AI. It posed nine personal finance questions to four major AI platforms. The tools scored between zero and six out of nine – none got every question right.
Pensions are very complex, making errors common when the insights don’t come from a qualified source. What’s more, some pension decisions may be irreversible – such as withdrawing your tax-free lump sum or consolidating your schemes – meaning acting on something you read online could have lifelong effects.
Guidance can be disingenuous
Many social media influencers may be looking to boost their engagement, upsell further content, or endorse a particular product or service. As a result, they might exaggerate claims to drive uptake, such as by promising exceptional results and quick wins.
AI, on the other hand, may not be deliberately misleading. But that doesn’t mean it’s always telling the truth.
- Hallucination: When an AI tool can’t find all the information you’re looking for, it might “hallucinate” to fill in the gaps. Essentially, this results in guidance based on assumptions rather than knowledge.
- Confirmation bias: Many tools have been found to validate the user’s input rather than provide an objective view. For example, if you ask, “Should I consolidate my pensions?”, it might lean towards confirming that you should.
- Unreliable sources: As discussed, AI tools can pull information from a range of unverified sources – including social media. So, if someone posts false information, it may be presented as a fact in the output.
By contrast, financial planners in the UK are regulated by the FCA. This means our advice must also be given in the best interests of our clients while adhering to a strict code of conduct.
Recommendations can be fraudulent
Financial insights found online can be really useful – but remember that financial criminals often pose as professionals in an attempt to defraud people like you.
In 2024, Pensions Age reported that a total of £17,657,249 was lost to pension fraud in the UK.
According to FCA research, 34% of those who had experienced pension fraud first encountered the scam online, with 21% saying they heard about it on social media specifically.
For example, fraudsters might:
- Encourage you to move your money into a new scheme, offering higher investment returns and lower risk.
- Promise early access to your pension fund (pensions are not normally accessible until 55, or 57 from April 2028).
- Offer you a “free pension review”, during which they might harvest your data.
The advancement of AI has made it even easier for fraudsters to gain trust. Deepfake technology can be used to digitally impersonate a trusted individual, such as a public figure or a loved one, to lure consumers into parting with their money.
Before acting on any pension advice found online, it’s crucial you verify the information, such as by speaking with a financial planner or checking whether the source is registered with the FCA.
Online advice is not tailored to you
Just because a strategy works for one person, that doesn’t mean it will work for you too.
A financial planner can provide qualified, regulated, and legitimate advice tailored to you. At Metis, we take the time to understand our clients on a personal level, from your current financial setup to your goals. That way, we can suggest practical, effective methods for building towards the future you’re dreaming of.
Get in touch
If you’re looking for support with managing your pension, get in touch with our independent, qualified financial planners to find out how we could help you.
Email enquiries@metiswealth.co.uk or call 0345 450 5670 today to find out what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The content of this article was accurate at the time of writing. While information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may affect the accuracy of the content.