Just 8.6% of those surveyed by the FCA for its latest Financial Lives survey had received financial advice on investments, pensions or retirement planning in the previous 12 months.

A higher number (17%) had used Government-backed guidance services such as MoneyHelper.

Rachael Griffin, tax and Financial Planning expert at Quilter, said this latest data from the FCA helps back-up the regulator's plans to reform the advice/guidance boundary.

She said: "It’s telling that just 8.6% of people accessed regulated financial advice in the past year, essentially unchanged from 2022. This is the advice gap in action. For many, pensions are the most significant long-term asset they’ll ever own, but without support, they’re flying blind. Reforming the advice/guidance boundary is essential if we want to reach the millions currently underserved."

The report also found that Britons are failing to save enough for retirement. The FCA’s Financial Lives survey found that a third (33%) of adults with a defined contribution have less than £10,000 saved. Another 12% did not know how much they have saved.

Just one third (33%) of DC pension holders had thought about how they are going to manage in retirement, with 38% not knowing how much they or their employer are contributing to their pension.

Dan Coatsworth, investment analyst at AJ Bell, said the figures on pension saving would also boost the FCA's plans for reforms.

He said:“The FCA’s survey shows that one third of adults have less than £10,000 saved in their pension, which is worrying. That’s not such an issue if they’re in their twenties or early thirties and have decades ahead to put money away, but it’s troubling if someone who is in their forties, fifties or early sixties is in this situation. It’s vital that people have the support they need to squirrel away as much as they can while they’re still working.

“Reforms such as ‘targeted support’, currently being prioritised by government and the FCA, should help with this. These reforms have the potential to enable people to make better-informed decisions about saving and investing, boosting financial resilience and supporting the FCA’s Consumer Duty reforms, which centre on delivering good outcomes for customers. The economy should also be a substantial beneficiary if these reforms help spearhead a retail investing revolution in the UK."

The savings report found that one in ten Britons have no cash savings at all, with another 21% having less than £1,000 to draw on in an emergency.

Three in five (61%) of people with over £10,000 in investible assets hold at least three quarters of these assets in cash, according to the FCA report.

These savers should be holding mainstream investments to improve long-term returns, the regulator said in its latest consumer savings report.

A quarter of those surveyed for the latest Financial Lives survey had low financial resilience, meaning that they have missed payments, are struggling to keep up with financial commitments, or do not have savings to help them through difficulties.

There had been some progress on access to basic banking services. There was an increase in consumer who hold current accounts and also more people banking online. There were 0.9m unbanked adults in 2024 compared to 1.1m in 2022 Just 1.2m adults (2%) were digitally excluded, a dramatic improvement from the 6.9m (14%) in 2017.

Sarah Pritchard, executive director of consumers and competition at the FCA, said: “Our data shows that finances are stretched for many - with some unable to save for a rainy day. And we know that some do not have the confidence to invest. But there are improvements – more people with current accounts and less digital exclusion. Our strategy will build on this to help people better navigate their financial lives.”