27/08/2019
Very Serious Message.
This week, Iain Duncan Smith outlined plans to increase the state pension age to 75. This has been met with criticism but, with significant changes to life expectancy, long-term funding of the state pension looks ever more challenging. We found some interesting stats on population demographics and life expectancy from Age UK:-
• Around 12 million people in the UK are over 65. In 50 years, it’s thought there may be another 8.5 million
• By 2030, 21% of people in the UK will be over 65, 6.8% will be 75+ and 3.2% will be 85+
• 85+ is the UK’s fastest growing age group, set to double by 2041 and treble by 2066
• There are just over 14,000 Centenarians in the UK - an increase of 85% in 15 years. By 2030, the number could be 21,000
• It is projected that 23% of male and 29% of female babies born in 2018 will live to the age of 100.
People are living longer, a trend that is set to continue. Money must work harder than ever before. Simply accumulating wealth, disinvesting, then drawing an income will no longer suffice. Along with life expectancy, advances in healthcare mean potentially staying healthier for longer and perhaps spending a little more throughout retirement.
Our industry is adapting. Many financial planning firms have evolved their propositions to cater for clients that still need to grow their wealth whilst taking income. If not already on the agenda, many will be exploring it as the discussion around CRPs increases.
However, no two clients are the same. Goals and time horizons will be different. With so many clients representing differing needs, building a proposition within your business that fits all could prove to be a headache. At 7IM, we have worked hard to build a repeatable and robust service that can plug into your business and help you manage the needs of all clients in retirement. Click here to watch our very own Justin Urquhart Stewart and Chris Justham discussing the 7IM Retirement Income Service.
You should be aware that the value of investments may go up and down and you may receive back less than you invested originally.
As ever, don't hesitate to contact me if you want to find out more.
