A recent survey has found that your clients’ biggest financial concern is failing to put enough aside for retirement and subsequently outliving their savings.

FTAdviser confirms that this is the main worry for 71% of UK savers, with the top three rounded out by:

• Inflation and the cost of living crisis (64%)
• Covering long-term care costs (49%).

With UK life expectancy rising over the last few decades – thanks to medical advances and improved living standards – factoring longevity into long-term retirement planning is crucial.

Expert financial advice can help. From saving early to managing pension decumulation and factoring in later-life care costs, keep reading for five simple ways Boolers could help you and your clients now.

1. Starting early can make pension savings more affordable

Figures from the Office for National Statistics (ONS) confirm that a man aged 65 in 2020 can expect to reach 83, while for women, the figure is closer to 86.

Pension saving early in a career gives your clients longer to save. They’ll be able to pay more in and have longer for those funds to grow, through investment returns and compound growth.

While we all generally earn less at the start of our careers, we can afford to put less aside too (as a percentage of monthly income). The important thing is for your clients to start early and then let contributions increase naturally as they progress in their careers.

2. At-retirement decisions should align with your client’s desired lifestyle

The Pension and Lifetime Savings Association (PLSA) recently released its updated retirement living standards report. Amid rising living costs, retirement is becoming more expensive too.

A “comfortable” retirement lifestyle, said to allow for spontaneity, foreign family holidays, and few worries about day-to-day spending, is said to require an annual income of around £59,000 for a couple. According to calculations published by the BBC, this would require a pension pot of between £490,000 and £790,000.

Your clients will be hoping for more than a “comfortable” retirement. After decades in a potentially high-pressure job, nothing short of a dream retirement will do.

At-retirement decisions can have long-term consequences. Seeking advice at this stage can help retirees to find the right mix of stable and flexible income.

While regular income might come through an annuity, say, drawdown and lump sums can provide flexibility. This combination could help to ensure that fixed expenses are covered, with some room for spontaneity and extravagances too.

3. Advice can help during the tricky stage of pension decumulation

It’s easy to think of accumulation as the tricky part of retirement planning. But living a dream retirement lifestyle without running out of money is its own juggling act.

Advice during their decumulation phase can help make sure your clients don’t outlive their retirement savings.

Opting for the regular income of an annuity might give peace of mind that fixed expenses are covered. Budgeting with flexible pension income, though, can be more challenging.

Not only does the onus for budgeting fall on your client, but external factors can also play a part.

Inflation reduces the spending power of your client’s pot and market dips can mean selling more units to provide the same level of income. Both can deplete your client’s pension pot more quickly than anticipated.

Ongoing advice and regular reviews will ensure that your clients’ plans remain on track, whatever happens in the wider global economy.

4. Factoring in later-life care costs and contingencies

Back in October 2023, the Guardian reported on the rising cost of UK care.

It found that around 408,000 elderly Britons currently live in care homes, with 70% in residential care and the remaining 30% in nursing homes. The average cost for residential care in 2022 was £800 a week (£41,600 a year).

Not only are costs rising, but more of us need care too. As we live longer, the number of years we spend in ill health is increasing. Factoring potential care costs into a financial plan from the outset is the best way to avoid shocks later.

Speaking to the experts also means that your clients will have a contingency. This could help to ensure that money put aside for care remains tax-efficient even when care isn’t needed.

5. Estate planning for a 100-year life

A recent ONS report confirms that in 2022, England and Wales were home to more than 550,000 people aged over 90.

Those of us living to 100, meanwhile, reached 15,120 – that’s double the number of centenarians compared to two decades ago.

Planning for a 100-year life is becoming increasingly important but has its unique challenges. For one, your client might need to budget for a 40-year retirement. That means not only having enough money to live but factoring in the legacy they want to leave behind too.

Your clients’ estate planning will be individual to them, but financial advice can ensure they’re well-informed and have all the available information. From “giving while living” to tax-efficient withdrawals of non-pension retirement income, we can be there for them when they need us most.

Get in touch

If you have clients who might benefit from help building “enough” of a retirement fund to last for a potential 40-year retirement, get in touch. Email enquiries@boolers.co.uk or call 0116 240 7070.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.