On the list of things that could derail the pensions market in 2020, a global pandemic was low down. Yet as lockdowns continue to impact employees, businesses and the economy, hundreds of thousands of people are also facing the prospect of revising their retirement plans.
Some are having to work longer than anticipated whilst others access their pension savings early to bridge income gaps. Analysis by the Institute for Fiscal Studies (IFS) found 13% of older workers changed their retirement plans as a result of the pandemic. Around 8% of individuals are planning to retire later, with a smaller percentage retiring earlier.
David Marchant, chief investment officer, Canada Life, and managing director of Canada Life Asset Management notes there is a need to ‘get back to basics' when it comes to investment today.
To this end, Marchant notes it is essential clients are advised appropriately, particularly when it comes to where they invest. "It is easy to forget with so many investment managers putting their own messages out, but we must ensure investments are kept simple, are transparent and straightforward. People will always come up with clever new fund ideas or focus on a hot new sector. The more complex the approach, the higher the charge for such products. I think that is the wrong approach."
Click here to learn how Canada Life and IFA peers are moving back to basics in order to ensure client retirement plans remain on track. The Remodelling Retirement guide also contains exclusive research from Trajectory on five new retirement journeys advisers should prepare for post-Covid.