Recent research sponsored by Aegon and conducted by NextWealth sheds light on the shifting landscape of retirement advice in the United Kingdom. The study, titled “Managing Lifetime Wealth: Navigating Retirement Advice,” underscores a substantial 67% of financial advisers attributing the surge in demand for retirement advice to the increasing lifespan of individuals. This trend is significantly influenced by both the ageing population and advancements in medical science.
Aegon’s ‘Second 50’ report aligns with these findings, emphasising the pivotal role of financial guidance in the post-50 phase of life. Steven Cameron, Pensions Director at Aegon, emphasises, “NextWealth’s report highlights the importance and vibrancy of the retirement advice market, with many factors contributing to healthy demand,” pinpointing the ageing population and medical breakthroughs as major catalysts for this increased demand.
However, challenges exist within this evolving landscape. The ongoing cost-of-living crisis, higher interest rates, and market instability are contributing factors shaping the demand for financial advice. A notable 58% of advisers acknowledge these economic conditions prompting clients to seek advice.
Moreover, changes in pensions, tax rules, and allowances, including the abolition of the lifetime allowance and alterations in annual allowance regulations, have sparked increased demand from nearly half of advisers’ clientele.
Despite the growing need for retirement advice, affordability stands as a substantial barrier, identified by 19% of advisers as the primary factor suppressing demand, leading to a growing ‘advice gap’. Steven Cameron notes, “Amid this positive surge, concerns linger as affordability remains a barrier to retirement advice.”
In response to these challenges, the Financial Conduct Authority and Treasury are actively engaged in a consultation on the advice guidance boundary review, presenting an opportunity to develop simplified advice solutions and focused support for those currently unable to afford it.
Despite potential dampening effects from negative publicity and regulatory changes like the FCA consumer duty, Cameron remains optimistic, stating, “While the consumer duty may be adding new considerations to the provision of advice, we hope that longer term it will further improve confidence amongst consumers.”
Heather Hopkins, Managing Director of NextWealth, underscores the importance of retirement advice as “a cornerstone of financial planning.” She acknowledges its dual role in achieving clients’ financial security and peace of mind, emphasising its significance to the business of financial planning.
While challenges such as affordability concerns and the impact of negative press and regulatory changes persist, this report serves as a reminder of the crucial role financial planning plays in addressing the genuine concerns and aspirations of clients.
At Wells Gibson Financial Planning, we go beyond traditional advisory services to ensure our clients navigate the complexities of retirement planning with confidence. We believe in helping our clients consider all available options, ensuring they can benefit and avoid making decisions that may not align with their goals, especially at the wrong time or for the wrong reasons.
Our comprehensive approach extends beyond individual consultations. Wells Gibson actively liaises with your family as needed, communicates seamlessly with your other professional advisors, such as accountants, and maintains close contact with third-party companies, including investment providers and insurance companies.
Your financial journey is unique, and we are here to provide the guidance and expertise necessary for a secure and fulfilling retirement. For more information on how Wells Gibson Financial Planning can tailor strategies to your specific needs, please don’t hesitate to get in touch with our dedicated team.