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Later Life Financial Planning - UK - September 2018

“The financial pressures on future retirees pose a big challenge in terms of engaging them with later life planning, as they’re more likely to be concerned about the sufficiency of their pension pot. However, this gives advisers opportunities to discuss different funding options, whilst products that can save people money in the long term are also likely to appeal.”

- Jessica Galletley, Senior Financial Services Analyst

This report will look at the following areas:

  • Semi-retirement will delay later life planning
  • Breaking the taboo around later life will encourage planning

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Increasing life expectancy makes later life planning more important
              • Figure 1: Expectation of life for those aged 65 in each year, period principal projection, by gender, UK, 1981-2064
            • One in five over-50s have no savings
              • Figure 2: Value of savings and investments, by age, June 2018
            • Rising funeral costs make it more important to plan in advance
              • Equity release sales soar
                • Figure 3: Sales of equity release products, by volume and value, 2011-17
              • Future of the Pension Dashboard uncertain
                • FCA’s Ageing Population report offers guidance to firms
                  • Companies and brands
                    • Encouraging conversations around later life
                      • 17% increase in later life financial planning adspend in 2017/18
                        • Figure 4: Total above-the-line, online display and direct mail advertising expenditure on later life financial planning products, 2013/14-2017/18
                      • The consumer
                        • Most have thought about their later life financial plans
                          • Figure 5: Consideration of later life financial plans, June 2018
                        • Half feel confident making plans
                          • Figure 6: Confidence in making later life financial plans, June 2018
                        • 45% would seek out professional advice
                          • Figure 7: Sources of information about later life financial planning, June 2018
                        • Most aren’t interested in later life products
                          • Figure 8: Ownership and interest in later life financial products, June 2018
                        • Income concerns are a priority
                          • Figure 9: Later life financial priorities, June 2018
                        • Majority want to live in their property for as long as possible
                          • Figure 10: Expectations for future living arrangements, June 2018
                        • 52% think financial services providers should do more
                          • Figure 11: Attitudes towards responsibilities for later life financial planning, June 2018
                        • Online platforms can make later life planning easier
                          • Figure 12: Attitudes towards managing and arranging later life finances, June 2018
                        • Increasing life expectancy puts pressure on to plan
                          • Figure 13: Attitudes towards working in retirement, June 2018
                        • What we think
                        • Issues and Insights

                          • Semi-retirement will delay later life planning
                            • The facts
                              • The implications
                                • Breaking the taboo around later life will encourage planning
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Increasing life expectancy makes later life planning more important
                                        • Rising funeral costs make it more important to plan in advance
                                          • Equity release sales soar
                                            • Future of the Pension Dashboard uncertain
                                              • FCA’s Ageing Population paper offers guidance to firms
                                              • Market Environment

                                                • Increasing life expectancy makes later life planning more important
                                                  • Figure 14: Expectation of life for those aged 65 in each year, period principal projection, by gender, UK, 1981-2064
                                                • One in five over-50s have no savings...
                                                  • …and future retirees could be even more worse off
                                                    • Figure 15: Value of savings and investments, by age, June 2018
                                                  • Rising funeral costs make it more important to plan in advance
                                                    • Majority of long-term care provided at home
                                                      • Figure 16: Number of over-65s receiving long-term care, 2015/16
                                                    • Equity release sales soar
                                                      • Figure 17: Sales of equity release products, by volume and value, 2011-17
                                                    • Rising internet usage will change how people plan for later life
                                                      • Figure 18: Percentage of people who had used the internet in the last 3 months, by age, 2011-18
                                                  • Regulatory and Legislative Changes

                                                    • Tax changes means couples set to pass on £1 million tax-free by 2020
                                                      • Future of the Pension Dashboard uncertain
                                                        • Reforms to Funeral Expenses Payment
                                                          • Funerals plans providers question need for FCA regulation
                                                            • CMA launches investigation into funerals
                                                              • FCA’s Ageing Population report offers guidance to firms
                                                                • Care for Older People green paper delayed
                                                                • Companies and Brands – What You Need to Know

                                                                  • Encouraging conversations around later life
                                                                    • 17% increase in later life financial planning adspend in 2017/18
                                                                    • Competitive Strategies

                                                                      • Encouraging conversations around later life
                                                                        • Intergenerational focus can help with later life planning
                                                                          • Lending into later life
                                                                          • Advertising and Marketing Activity

                                                                            • 17% increase in later life financial planning adspend in 2017/18
                                                                              • Figure 19: Total above-the-line, online display and direct mail advertising expenditure on later life financial planning products, 2013/14-2017/18
                                                                            • SunLife is biggest spender on later life products
                                                                              • Figure 20: Total above-the-line, online display and direct mail advertising expenditure on later life financial planning products, by advertiser, 2015/16-2017/18
                                                                            • Nielsen Ad Intel coverage
                                                                            • The Consumer – What You Need to Know

                                                                              • Most have thought about their later life financial plans
                                                                                • Half feel confident making plans
                                                                                  • 45% would seek out professional advice
                                                                                    • Most aren’t interested in later life products
                                                                                      • Online platforms can make later life planning easier
                                                                                        • Increasing life expectancy puts pressure on to plan
                                                                                        • Consideration of Later Life Financial Plans

                                                                                          • Most have thought about their later life financial plans…
                                                                                            • Figure 21: Consideration of later life financial plans, June 2018
                                                                                          • …but only two in five have taken action
                                                                                            • Figure 22: Consideration of later life financial plans, by age, June 2018
                                                                                        • Confidence in Making Later Life Financial Plans

                                                                                          • Half feel confident making plans
                                                                                            • Figure 23: Confidence in making later life financial plans, June 2018
                                                                                          • Lack of confidence puts people off planning
                                                                                            • Figure 24: Confidence in making later life financial plans, by consideration of later life plans, June 2018
                                                                                        • Source of Information on Later Life Planning

                                                                                          • 45% would seek out professional advice
                                                                                            • Banks and building societies are an easy option
                                                                                              • Figure 25: Sources of information about later life financial planning, June 2018
                                                                                            • Online guides and assessments can introduce people to later life planning
                                                                                              • People are reliant on recommendations from family and friends
                                                                                                • Figure 26: Sources of information about later life financial planning, by age, June 2018
                                                                                            • Ownership and Interest in Later Life Products

                                                                                              • Most aren’t interested in later life products
                                                                                                • Figure 27: Ownership and interest in later life financial products, June 2018
                                                                                              • 25% are interested in owning a prepaid funeral plan
                                                                                                • Changing attitudes mean providers can be more frank about later life planning
                                                                                                • Later Life Financial Priorities

                                                                                                  • Income concerns are a priority
                                                                                                    • Figure 28: Later life financial priorities, June 2018
                                                                                                  • Half want to ensure their will is up to date
                                                                                                    • Figure 29: Later life financial priorities, by age, June 2018
                                                                                                  • 29% think it’s important to have money aside for long-term care costs
                                                                                                  • Future Living Arrangements

                                                                                                    • Majority want to live in their property for as long as possible
                                                                                                      • Figure 30: Expectations for future living arrangements, June 2018
                                                                                                    • Only 9% expect to release equity
                                                                                                      • A third of 50-57-year-olds expect to downsize
                                                                                                        • Figure 31: Expectations for future living arrangements, by age, June 2018
                                                                                                    • Responsibilities for Later Life Financial Planning

                                                                                                      • Two thirds think the government should do more…
                                                                                                        • …but there’s still an expectation of financial services providers
                                                                                                          • Figure 32: Attitudes towards responsibilities for later life financial planning, June 2018
                                                                                                      • Managing Later Life Financial Plans

                                                                                                        • Online platforms can make later life planning easier
                                                                                                          • Figure 33: Attitudes towards managing and arranging later life finances, June 2018
                                                                                                        • Low levels of interest in paid advice
                                                                                                          • Figure 34: Attitudes towards managing and arranging later life finances, by age, June 2018
                                                                                                      • Later Life Financial Planning and Retirement

                                                                                                        • Increasing life expectancy puts pressure on to plan
                                                                                                          • Figure 35: Attitudes towards working in retirement, June 2018
                                                                                                        • 55% don’t know when to think about later life financial planning
                                                                                                          • MPs propose care tax
                                                                                                            • Figure 36: Attitudes towards working in retirement, June 2018
                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                            • Abbreviations
                                                                                                              • Consumer research methodology

                                                                                                              Later Life Financial Planning - UK - September 2018

                                                                                                              US $2,552.20 (Excl.Tax)