Cost of Living Crisis and Market Volatility Drive Increased Demand for Retirement Advice
New research from Aegon and NextWealth shows demand for retirement advice continuing to increase. The 2023 edition of the ‘Managing Lifetime Wealth: Retirement Planning in the UK’ report builds upon research conducted in previous years to show a number of clear trends emerging.
Against the backdrop of market declines and economic crises throughout 2022, their research establishes that retirement advice has remained a hugely important part of the financial planning industry, with demand growing in the past year. Financial planners estimate that well over half (58%) of the assets they advise on are for clients receiving retirement advice, an increase from 55% the previous year. They expect this to continue to rise, reaching 62% over the course of the next three years.
Last year’s report showed that changing attitudes to work were driving demand for retirement advice, as many people reassessed their priorities during the pandemic, with a marked increase in clients retiring early.
This year, financial planners attribute much of the demand to uncertainty and volatility in financial markets and the rising cost of living. As part of the research, people were asked about their views. Three quarters (75%) say that the economic situation over the past year has led them to consider changing their level of risk, the income they take or review how much and/or when they pass on money. Changes to the funding of social care is seen as the second biggest driver of demand for retirement advice according to planners (42%).
Ronnie Taylor, Chief Distribution Officer at Aegon, comments: “After a tumultuous time over the past year, with volatility in the markets and regulatory change, retirement advice has remained a vital element of the financial planning industry. It’s positive to see that sentiment amongst planners around the retirement advice part of their businesses has lifted too. The research shows that the cost-of-living crisis plays a huge part in client demand for retirement advice, which is perhaps not too surprising considering volatile markets, rising interest rates and high inflation will naturally impact financial plans. With many advised clients admitting they plan on reviewing how they manage their money, the findings highlight the value of getting professional advice. This can offer invaluable support in making good financial decisions in volatile times and in planning for retirement”
Heather Hopkins, Managing Director of NextWealth, comments: “Since starting this research in 2018, we’ve seen a number of significant events that have impacted the demand for retirement advice. Each of those events, whether economic, political, regulatory or health-related, were very different in nature but all demonstrate the importance of good quality financial advice when times are uncertain. The resilience and adaptability of those providing this advice has never been more in focus as we move through 2023.”
Retirement planning is an important and often complex area of financial planning. By seeking professional advice, you can increase your chances of achieving your retirement goals and plan for your retirement with greater confidence.
If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.
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Disclaimer
The content of this article is for information purposes only and does not constitute a personal financial recommendation. You should always speak to a regulated financial planner before taking financial advice. This article is intended for UK residents only. All information correct at time of publication.
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