As your clients approach the end of their working life, they should be writing a bucket list and planning how they are going to enjoy their later years. Whether they plan to travel the world or spend more time with family, now is the time for them to look forward to this next phase of their life.
Unfortunately, the reality for many people is that they are not excited about the prospect of retirement as they feel unprepared for this step. Indeed, research reported in MoneyAge shows that two-thirds of Brits are not confident about their retirement.
This is often because they have a lack of knowledge about how much they have in their retirement pot and how much they need to fund their desired lifestyle. Many simply don’t know if they have “enough” to retire.
The good news is that financial advice can help your clients feel more confident about their retirement.
Read on to learn why your clients may be feeling lost with their retirement planning, and how working with a planner can improve their situation.
50% of UK consumers find pension information “overwhelming”
A study from Standard Life found that half of people are overwhelmed by pensions information and 41% of people don’t know what to do with information once they have it.
While your clients have access to information about their pension, they may still have significant gaps in their knowledge because they don’t understand how that information affects their personal retirement plan.
Ultimately, this means they likely cannot make informed decisions about their pension and achieve the lifestyle they want in retirement.
Fortunately, with the right education, your clients will feel more informed and confident about their pension. The key areas people want to know about are:
- How much is in their pension pot
- How much income they will get from their pension
- How to tell whether they are contributing enough.
Although people often look to their pension provider’s website or friends and family for answers to these questions, the study found that 83% of people believe that financial advisers are a good source of information.
In many ways a financial planner acts like a “translator” for your clients. We can take all the complex information and present it in a simple way, so your clients understand how it affects their unique retirement plan.
When they are well informed, your clients will likely feel a lot more confident about their retirement.
55% of people don’t know how much they have saved for retirement
According to the information reported in MoneyAge, over half of Brits don’t know how much they have in their retirement pot.
Surprisingly, those closer to retirement are less likely to be pension-aware. A worrying 57% of 55- to 64-year-olds said they didn’t know how much they had, compared with 51% of 25- to 34-year-olds.
Additionally, people have gaps in their knowledge about how much they are likely to need for a comfortable retirement.
Indeed, 45% of people thought they would need “up to £200,000” but the figure is somewhere closer to £466,600 for somebody earning £35,000 – assuming they draw two-thirds of their current annual income during retirement.
So, as you can see, your clients may be underestimating how much they need to save for their retirement.
To help prevent this, we will often use our initial meeting with your client to discuss their personal goals and the lifestyle that they want in retirement. We can then help your client to understand how much they need to save for retirement to fund that lifestyle, and create a plan to get there.
With a specific goal to work towards, and a robust plan to achieve it, retirement should feel far more achievable for your clients.
66% of advisers say their main role is to provide reassurance
While your clients may assume that getting advice on investments or pensions is the main benefit of seeing a financial planner, that may not be the case.
Indeed, FTAdviser reports that 66% of advisers believe their main role is to provide reassurance and instil confidence in their clients.
This is especially true during the cost of living crisis because people are naturally concerned about how their wealth could be affected and if it will derail their retirement plans.
The good news is that people who take financial advice report being less concerned about their financial stability. While 46% of people who didn’t take advice said they were concerned, this dropped to 26% for people who had worked with a financial planner.
Get in touch
If your clients are unsure about their retirement plans, we can give them the advice they need to move forward with confidence.
Please contact us on hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company that was a 2022 VouchedFor Top Rated firm, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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 results.
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.
