The pandemic led to many of us reviewing our priorities and it had a significant effect on people who are in later life, according to the findings for the latest Managing Lifetime Wealth: Retirement Planning in the UK research report we’ve produced for Aegon. You can download the full report here.

More advised clients are retired 

According to the advisers we surveyed, more clients are moving towards full retirement, with the number of clients who remain fully employed dropping by 5% since 2021. This means just two in five (40%) clients are now in full employment.

This has stimulated demand for retirement advice. Almost half of the financial advisers (47%) we surveyed say that demand for retirement advice has increased more than usual due to the pandemic.

It’s interesting to note that technology is playing a greater role in retirement advice. Our research found that the majority of advisers are using modelling tools to determine safe withdrawal rates. Since 2018 there has been a significant shift away from using fixed rates towards using modelling tools. This year is the first year that the majority (51%) of advisers stated that they are using modelling tools to determine a safe withdrawal rate.

The most popular are the cash flow modelling tools, CashCalc and Voyant. Advisers say that ease of use is the number one priority when selecting a tool. Reporting, functionality, and value for money are significant secondary factors, highlighting the need for tech providers to focus on making the user experience as simple as possible.

Looking ahead

Our interviews with financial advisers for this research and a review of the comments on the survey forced us to think that the process and output of retirement advice might change radically in the next five years. It’s worth reading the full report to understand all the different elements that have led us to this conclusion.

Concerns about operational efficiency to support a larger client base came up repeatedly as did the desire to underpin a practice with technology solutions to power human advice.

The ongoing review of DB transfer advice has been difficult, but we are arguably at a point where advisers (and the regulator) have a much clearer view of what the regulator expects from retirement advice.

No one can pretend retirement advice is easy, but the rapid development of new techniques, tools and propositions make it an exciting part of the market to be working in. We suspect retirement planning may not be happening in the metaverse any time soon, it will continue to evolve rapidly, and we look forward to keeping you informed of developments over the coming year

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