Almost 90% of IFAs believe there needs to be product innovation in the retirement planning market to take into account increasing longevity, claims Lincoln Financial.
A survey of 107 advisers, carried out by George Street Research on behalf of Lincoln Financial Group, reveals 89% of IFAs think the current range of retirement planning products should be expanded.
Recent figures from the Office of National Statistics (ONS) show a 65-year-old man can now expect to live a further 16.6 years while a 65-year-old woman can expect a further 19.4 years of life. Life expectancy at 65 has increased by 3.7 years for men and 2.5 years for women since 1980-82.
Lincoln Financial Group is warning increased longevity is placing further strain on retirement income planning as inevitably the longer people live the longer their finances have to stretch.
Its fears that traditional products such as annuities and income drawdown may become less appropriate are shared by advisers, as just 7% of respondents believe there is no need for innovation in retirement planning.
Helen Turner, director of business development at Lincoln Financial Group, points out the financial services industry has a strong record of adapting to change in society and providing solutions which fit clients’ circumstances.
She says while increased longevity is to be welcomed, she warns the benefits of living longer will be lost on people if they do not have the retirement income to ensure they can enjoy their longer life.
She adds; “We agree with IFAs who want to see greater innovation in the retirement income market. Traditional products such as annuities and income drawdown do an excellent job but both have well-known limitations.”
“IFAs are telling the industry they want to see more innovation in order to meet the needs of their clients and it is up to the industry to respond.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7034 2681 or email [email protected]IFAonline
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