AXA Wealth specialist products managing director Nick Elphick on the need for financial advisers and providers alike to be more innovative in creating products and services to provide solutions for those at and in retirement.
The idea of retirement changes depending on who you speak to: for some it is a set date in time when they are going to stop working and begin to enjoy the longest holiday of their life. For others it is about spending more time with their family, while others still may be considering working longer but reducing their hours.
However, with increasing longevity, low interest rates that are eroding savings, low annuity rates affecting people's pension income and rising costs of living, the idea of retirement - and more importantly how we're going to afford it - is constantly evolving. The ideas about retirement our parents had are going to be different to our own and different again to our children.
The question is - are we going to be better off than our parents? And what will retirement look like by the time our children reach it?
This year sees somewhat of a landmark for retirement: the youngest of the baby boomer generation will be turning 50, with the oldest celebrating their 68th birthdays.
I always think of this generation as being particularly interesting: born between 1946 and 1964 they have seen some of the most significant changes in terms of economics, technology, governments and trends. Often cited as a generation to have ‘never had it so good,' is this really the case?
Consideration of certain factors would lead many to believe that baby boomers have had a fairly good ride: many have been able to get on to the property ladder and make the most of a growing property market and some will be recipients of defined benefit pension schemes, while they will be largely unaffected by increases to the state pension age announced in last year's Autumn Statement and the introduction of the flat rate state pension in 2016.
However, in addition to their own financial situation many baby boomers will be considering the financial independence of their children.
While they should be focusing how they are going to be funding their retirement, they may well be parents to children unable to get on to the property ladder and are therefore returning home.
Budget constraints and personal circumstances may mean thinking how far parental financial support can extend.
How long you are able to continue to financially support your children will be different for each person, but for those who will be looking to reduce their working hours or stop working all together a thorough financial plan will be necessary.
This in turn demands that financial advisers, and providers alike, supporting those at and in retirement must be more innovative, creating products and services to provide solutions to developing concerns.
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