Sizeable changes are expected for your clients’ retirement journeys

The landscape of journeys to retirement is set to change dramatically over the next 15 years.

A report by Canada Life suggests that by 2035, there will be almost 21 million people over the age of 60 in the UK. However, as the way these people accumulate and spend wealth changes, their experiences both through to and in retirement will be markedly different to those currently over this age.

With a ‘rise in individualism’ and a declining relevance of social norms, advisers need to prepare themselves to support clients whose journeys to retirement will be very different to their current client base.

Two retirement journeys set to be the focal point

As society changes, the way people spend not only their time, but their money is evolving. This is set to have a knock-on effect on retirement journeys for clients from all walks of life.

Currently, a vast section of advisers have designed their business model to suit a group of clients with strong financial foundations (Financially Mature, Stress Free). These people have built comfortable levels of wealth, often over a long period of time.

This demographic made up 21% of retirees in 2020. However, Canada Life has warned that this group with strong financial foundations is set to decrease as a total proportion of the retirement market over the next 15 years.

In contrast, two retirement journeys are set to move to the forefront. ‘Complex Families, Complex Finances’ are clients whose family situation makes their financial planning difficult. This can range from divorces and second marriages to supporting both children and ageing parents’ financial needs. This subset already makes up 32% of today’s retirement market and is forecast to grow even further.

Meanwhile ‘Late Financial Bloomers’ consist of those who have built their financial stability later in life. These clients have less time and therefore more pressure to build funds for retirement quickly. They currently make up 6% of over-60s but by 2035 this is expected to grow significantly.

The importance of later-life planning

As lives get longer and ‘traditional nuclear families’ become less common, advisers have to work harder than ever to ensure that their clients do not run out of income in retirement. As a result, risk mitigation will continue to be a key task as many clients are faced with unpredictable income streams.

Whatever your clients’ needs, our Inheritance Tax Services offer not only tax efficiency. They are also specific to the clients’ specifications whilst keeping them in control of their estate.

If you would like to find out more about our Inheritance Tax Services, click here or contact an experienced member of the Stellar team today on 020 3195 3500.

Written by Jack Dobinson

Important Information

Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.

Stellar Asset Management Limited of 20 Chapel Street, Liverpool, L3 9AG is authorised and regulated by the Financial Conduct Authority.