Pensions - Articles - Journey through retirement is changing


The journey through retirement is changing as over 50% of people are no longer retiring in the usual way, and retirees today predominantly targeted and catered for by financial advisers are growing smaller as a customer group. Classed as ‘Financially mature and stress free’, this customer group, which used to represent almost a third of the market, has already contracted by 25% since 2010 and now accounts for around one-fifth of the over 60’s market today. This trend is expected to continue over the next 15 years, Canada Life today reveals.

 Retirees in this group can be categorised as having very comfortable levels of wealth and health built up over a lifetime of good fortune in employment and family life. The decline of this group can be attributed to societal changes such as fewer people having defined benefit pensions and the declining prospect of home ownership for a generation of renters. These societal shifts stem from changes such as how we; are choosing to spend our time, accumulate and spend wealth, the rise of individualism and the declining relevance of social norms. 

 A decade ago, almost a third of those in their 60’s and 70s were in this ‘Financially mature and stress free’ category, according to research carried out by Canada Life in conjunction with strategic trends forecasting agency Trajectory Partnership. Today these retirees currently make up around 21% of the retirement market, and financial advisers have built their business models to cater for this group.

 However, in contrast to the decline of Financially Mature and Stress Free retirees, two emerging retirement journeys will grow to dominate the retirement market over the next 15 years.
 • Complex Families, Complex Finances will be the largest group of retirees by 2035, as divorce, second marriages, step children, and the need to support ageing parents all impact their finances.
 • Late Financial Bloomers, are a small but fast-growing group. These people get married, buy property, have children and build financial stability later in life, condensing the time they have to build wealth for retirement.

 Sean Christian, MD and Executive Director, Canada Life’s Wealth Management Division, said: “As an industry we have already witnessed a significant shift in client profiles over the last decade and this trend is only going to accelerate. We need to continue to understand these changes as we work to better support advisers to help these emerging groups of retirees who will dominate the market in the coming years. Advisers are perfectly placed to balance the needs of clients today and consider how the more complex retirement journeys of the future will shift how they support and guide a future generation of clients.”
 
 Paul Flatters, Co-Founder and CEO, Trajectory, said: “Just 10 years ago, the largest group of retirees would have fitted into the ‘Financially Mature and Stress Free’ category, but social norms are changing and disrupting the retirement market. Accelerated by the events of 2020, unemployment rates will continue encouraging boomerang children to return to the family home, while divorce rates, second marriages and the likelihood of needing to pay for elderly parents’ care costs are all on the rise. Coupled with the fact that participation in defined benefit pension schemes is declining and we have a generation of renters facing the prospect of never owning their own property, all of which is impacting the declining dominance of these retirees.”
  

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.