Rethinking retirement plans following the pandemic
One interesting consequence of the Covid pandemic is a surge in over-50s seeking professional financial advice.
New research from insurer Scottish Widows shows that almost half of Independent Financial Advisers (IFAs) have seen an increase in enquiries from over-50s during the past 18 months.
The reasons for seeking advice during the pandemic are wide-ranging but include stock market volatility, being placed on furlough, experiencing job losses, and accelerating retirement plans.
At the same time, some have experienced a lower cost of living during the pandemic, allowing them to save and invest more for the future.
Whether the pandemic has brought good or bad financial fortunes, there is a need for professional financial advice to address the challenges.
According to the research, 56% of over-50s who approached an IFA for help are seeking advice on pension planning, with 54% looking for assistance for early retirement.
53% said they want advice on partial or phased retirement, and 53% need help to access their pension at the point of retirement.
A similar story comes from HR decision-makers, with a significant increase in over-50s workers requesting information about their workplace pension and retirement plans.
More than half of HR professionals experienced increased information requests about pension savings levels and estimated retirement income, with 44% seeing a rise in employees asking to increase their pension contributions.
People are also showing more interest in the performance of their workplace pensions, with 46% of HR professionals saying more over-50s are looking for a greater financial return on their pension investments following the pandemic.
There is a rising level of interest in ‘green’ and ‘ethical’ investments too.
The pandemic seems to have prompted many over-50s to reconsider their retirement plans, with 46% of HR decision-makers saying more older employees are asking to take a phased approach to retirement.
The same proportion has seen an increase in requests to delay their planned retirement date.
Siobhan Barrow, Head of Intermediary Distribution at Scottish Widows, said:
“A sudden shift in financial status can often feel overwhelming. Money worries cause people to experience difficulties in lots of areas in their lives, from their physical and mental well-being to their personal relationships. Even those seeing an unexpected uplift in wealth may be confused about how they should feel and respond.
“Pension Awareness Day is a good prompt for people to start thinking long-term and seek solid financial advice, no matter whether they’ve experienced financial challenges or opportunities over the last 18 months. It’s encouraging to see many over 50s open enough to speak to others and take positive action, like increasing pension contributions. Your fifties is the critical time to get finances organised and we must ensure more people, of all ages, feel comfortable seeking out professional advice.”
At Wells Gibson, we believe it’s never too early to be planning for financial independence; it is far better to be prepared than to need repaired. This is why having a comprehensive wealth plan, that has your desired lifestyle at its core, will ensure you can visualise what your financial future could look like. It can help you to be less anxious about tomorrow, as well as give you the certainty to know you can secure all that you value.
Contact us today to discuss any queries you have.