Advice propositions that blend robo-advice and human interaction are reducing the risk of retirement poverty, according to analysis by Defaqto.

Defaqto noted that a lack of pension and savings advice amid an ageing population and rising cost of living was putting more people at risk of retirement poverty.

Figures from the Financial Conduct Authority showed that 69 per cent of the 885,000 pension pots accessed for the first time in 2023/24 were accessed without advice.

However, innovative hybrid advice solutions were looking to help counteract this, Defaqto stated, with the firm identifying ‘pioneers’ in this market.

Four pension advice products were earmarked as ‘trailblazers’, which were leading the way in blending pension advice in 2025.

Defaqto highlighted these as: Pension Potential from Punter Southall; Destination Retirement from Hub Financial Solutions, part of Just; Smart Retire from Smart Pension; and My Time.

“We have seen the birth of hybrid propositions which aim to seamlessly amalgamate technology and robo-advice with human interaction and regulation,” said Defaqto pensions expert, Richard Hulbert.

“It’s an offering that as consumers we have become accustomed to in many areas of life.

“We’ve looked at those who are leading the trend specifically in standalone propositions that advice firms can white label. This can give advisers a much-needed new revenue stream by accessing clients currently outside of their target markets.

“Most importantly however, it's opening up retirement finance advice to a wider market which is crucial to reducing the number of people risking a poor standard of living once they’re retired.”

Defaqto added that the topic of robo-advice and the role of AI had raised concerns amongst advisers and consumers.

However, it noted that hybrid pension advice propositions needed regulated financial advisers to populate them.

“The automated element often can’t go beyond the education and guidance stage,” Hulbert continued.

“Advisers’ clients will quickly find themselves at the point of needing tailored, regulated advice and will value the empathy and understanding that can only be given via a face-to-face, personal interaction.

“The most comprehensive hybrid propositions broadly follow the same steps. Education is very robo-led as is the initial process of uploading information or documents to portals. Automated advice can also often be relied on for annuity purchases to cover essential spending.

“Centralised Retirement Propositions then need to be very considered and regulated advice is needed to ensure suitability. This is where clients will want to feel very protected and know a person has given great consideration to their needs.”

---