Recent turbulence in world markets serves as a timely reminder of the importance of planning effectively for retirement.
This issue is particularly important for the 'Sandwich Generation', a growing body of baby boomers that is struggling to provide financial support to children and elderly parents simultaneously.
New international research from The Hartford reveals that nearly one in four baby boomers (23.2 %) in the UK provides financial care to both ends of the family spectrum, with nearly one in three (31.5%) expressing at least some level of concern that they will not be able to continue to afford financial care for their immediate family in the future.
The UK is fast catching up with the situation in Japan which has already experienced an explosion in the percentage of baby boomers concerned about supporting both children and elderly parents.
Our research shows that in Japan, nearly three in four (73.9%) of baby boomers are concerned about having to support both their children and elderly relatives. We haven't reached this level of concern yet in the UK, but more than a third of respondents said they have already had to make at least some change to their preferred lifestyle - be it not dining out, forgoing holidays or cutting back on purchases - to ensure they have enough funds.
Undoubtedly more people in the UK will find themselves in the 'sandwich' over the coming years as the impact of changes in demographics and government policy hit home. This illustrates the growing need for consumers to plan for financial self-reliance in retirement, rather than relying on their children.
The Hartford's research found that IFAs are ideally placed to give guidance to UK consumers on this growing financial trend, and to help their customers ensure they have a sustained and sufficient income, that is guaranteed despite market volatility, to enjoy their 'golden years'.
More than anywhere else in the world, UK consumers have a high degree of trust in IFAs - 36% of respondents said they would rely on an IFA for credible advice, a figure much higher than the U.S. (24%) or Japan (9%). The current volatile equity markets will undoubtedly mean that IFAs will look at all the options available in providing a guaranteed retirement income - options with which the consumer can not only protect themselves from the market down turns, but also have the flexibility to benefit from the market gains. Now is the time to address the sandwich generation issue and make customers aware of these innovative, contemporary retirement solutions that can help them to enjoy their later years.
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