2022
9
UK Consumers and Later Life Planning Market Report 2022
2022-12-30T03:01:47+00:00
OX1100583
2195
159019
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Report
en_GB
“There is considerable latent demand for later life planning among over-45s, especially among those aged 45-64. If providers can effectively tap into this and engender earlier engagement, for example by…

UK Consumers and Later Life Planning Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Consumer and Later Life Planning Market Report examines the later life plans and provisions consumers’ have made, consumers’ concern about the rising cost of living affecting their later life plans and consumer awareness of lasting power of attorney. This report includes Mintel’s independent market and consumer analysis, providing industry insights to help you interpret future consumer attitudes towards later life planning.

Current Later Life Market Landscape

As well as being large, the market for later life planning is also diverse. It comprises a broad range of planning needs, related to long-term care funding, pensions and retirement, funerals, wills and estate planning.

Mintel’s later life market research reveals that the need to make financial plans and provisions for the future is even greater now because of the cost of living crisis. High inflation erodes the value of people’s savings over time and reduces living standards. It hampers people’s ability to save and tempts those who are struggling to make ends meet to dip into pension pots earlier than intended.

Consumers’ Later Life Planning Statistics and Key Industry Trends

Along with the impact of high inflation, procrastination is another major threat to people’s future financial security. The problem is that an intention to do something does not always translate into action. People often put off making important retirement planning decisions, even when they know they should or have identified them as a priority.

There is demand for financial guidance and advice remains high, though many in the later life market continue to be constrained by time and cost pressures. In addition, equity release sales hold up, driven by cost of living pressures and high house prices.

  • 57% of those over 45s have made a will, and 20% have made provisions for their funeral.
  • 4% of Brits over 45 have taken out an equity release scheme and 3% plan to do so in the next 12 months.
  • 66% of people who have set up an LPA have a clear understanding of what it is, while a further 27% have some understanding.
  • 39% of adults over 45 are ‘fairly worried’ about the rising cost of living affecting their retirement.

Future Trends in the Later Life Market

In the longer term, a recovered economic backdrop will see many improved financial situations for the over 45s. There will be a significant pent-up demand for financial advice and renewed interest in later life planning, such as annuities and income drawdown. Digital developments in the financial services sector will continue to create new opportunities for advisers and product providers to reach and engage the desired target audience.

To discover more about the UK Consumer and Later Life Planning Market Report 2022, read our UK Retirement Planning Market Report 2022, or take a look at our Financial Services Market Research Reports.

Quickly Understand

  • An assessment of the later life plans and provisions made, or intended to be made, by over 45s, including taking financial or legal advice.
  • The level of consumer concern about the rising cost of living affecting their later life plans.
  • The level of consumer confidence in being financially secure throughout retirement and later life.
  • The level of awareness and understanding of lasting power of attorney.
  • General attitudes towards later life planning and financial security.

 

Expert Analysis from a Specialist in the Financial Sector

This report, written by Sarah Hitchcock, a leading analyst in the financial services sector, delivers in-depth commentary and analysis to highlight the current trends in the later life market and add expert context to the numbers.

There is considerable latent demand for later life planning among over 45s, especially among those aged 45-64. If providers can effectively tap into this and engender earlier engagement, for example by offering free will reviews or retirement health checks, it would expand the client base and generate new opportunities for growth, as well as improve the outcomes for retirees in the UK.”

Sarah Hitchcock
Financial Services

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • Products covered in this Report
        • Executive Summary

            • The five-year outlook for the later life planning market
              • Figure 1: Outlook for later life planning market, 2022-27
            • The market
              • The target audience for later life planning is huge and continually expanding…
                • Figure 2: Projected population in the UK, by age, 2020-50
              • …with a diverse range of planning needs that typically require expert help
                • Most people are accessing pension pots without taking advice or guidance
                  • Figure 3: Proportional distribution of DC pension pots accessed for the first time*, by use of advice or guidance, year to March 2022
                • Equity release market relies heavily on advisers
                  • Figure 4: Number of new equity release plan sales, 2016-22
                • Advisers play a limited role in the funeral planning market
                  • Figure 5: Volume sales of funeral plans versus guaranteed acceptance whole-of-life insurance, 2016-21
                • The consumer
                  • 13% of over-65s are still working – many of them on a self-employed basis
                    • Figure 6: Working status, by age, 2022
                  • 79% of over-45s are homeowners
                    • Figure 7: Housing tenure, by age, 2022
                  • Savings levels peak in the 65-74 age group
                    • Figure 8: Amount of cash savings, by age, 2022
                  • Many over-45s intend to make plans for later life but have yet to do so
                    • Figure 9: Types of later life plans or provisions made or intending to make, 2022
                  • A quarter of 55-64 year olds intend to seek investment or pension advice
                    • Many advice-takers are keen to seek further advice
                      • 10% of homeowning over-45s expect to take out an equity release plan in the future
                        • Figure 10: Proportion of over-45 homeowners who have taken out an equity release scheme or who plan to, 2022
                      • Most over-45s have heard of lasting power of attorney
                        • Figure 11: Awareness of lasting power of attorney, 2022
                      • Many over-45s are concerned that rising inflation will impact their later life plans…
                        • Figure 12: Level of concern about rising inflation affecting later life plans, 2022
                      • …partly due to their reduced capacity to save
                        • Figure 13: Ways in which rising inflation will affect later life plans, 2022
                      • Merely 54% of over-45s are confident of being financially secure in later life…
                        • …despite this being important to the vast majority of them
                          • Figure 14: Agreement with statements about later life planning and financial security, 2022
                      • Issues and Insights

                        • Focus on value and engagement to overcome the high cost-of-living barrier
                          • Promote the idea that a little planning today saves time and money tomorrow
                            • In-person community events to help people to take initial steps
                            • Size of the Market for Later Life Planning and Advice

                              • Economic backdrop increases the need, but limits the capacity, to plan
                                • Figure 15: Outlook for later life planning market, 2022-27
                              • Advisers play a vital role in the later life market
                                • Figure 16: Proportion of over-45s who have made various plans or provisions for later life, by those who have taken advice and those who have not, 2022
                              • Number of financial adviser firms held up during the pandemic
                                • Figure 17: Number of regulated retail intermediaries, by category of firm, 2019-21
                              • Majority of adviser business relates to the over-45 market
                                • Figure 18: Number of regulated retail investment advisers, by type of firm, 2021
                            • Market Environment

                              • Scope of later life planning is vast
                                • Over half of all pension pots accessed are fully withdrawn
                                  • Figure 19: Number of DC pension pots accessed for the first time, by usage, 2018/19-2021/22
                                • Many fail to take guidance or advice before accessing their pension
                                  • Figure 20: Number of DC pension pots accessed for the first time, by use of advice or guidance, 2021/22
                                • Equity release market experiences strong growth
                                  • Figure 21: Number of new equity release plan sales, 2016-22
                                • Sales of prepaid funeral plans were up 35% in 2021, while over-50s insurance plan sales were down 6%
                                  • Figure 22: Volume sales of funeral plans versus new guaranteed acceptance whole-of-life insurance, 2016-21
                                • Funeral plans now under the remit of the FCA
                                • Market Drivers

                                  • The expansion in the over-45s population boosts demand for later life planning
                                    • Figure 23: Projected population in the UK, by age, 2020-50
                                  • Longer retirement timeframes increase the need for financial planning…
                                    • …as does high inflation…
                                      • Figure 24: Proportion of adults who have been impacted by price increases and related issues, by age, 2022
                                    • …but most of those aged 45-64 have limited scope to save
                                      • Figure 25: Current financial situation, by age, 2022
                                    • Rising interest rates increase the pressure for middle- and higher-income households
                                      • Living longer but not necessarily in good health
                                        • Figure 26: Number of adults accessing long-term care during the year, by age, 2015/16-2021/22
                                      • Urgent social care reform postponed
                                        • Planning for long-term care requires specialist advice
                                          • Over-45s should have LPA in place
                                            • Figure 27: Power of attorney registrations in England and Wales, by type, 2012-21
                                          • OPG launches a new digital service for LPA users
                                          • Financial Profile of Over-45s

                                            • Household income and pension participation peak around age 50
                                              • Many over-65s are choosing to phase into retirement
                                                • Figure 28: Working status and household income, by age, 2022
                                              • Most over-65s own their home…
                                                • …giving them the opportunity to unlock some of this equity
                                                  • Figure 29: Housing tenure, by age, 2022
                                                • Around a third of over-65s have less than £10,000 in savings
                                                  • Figure 30: Amount of cash savings, by age, 2022
                                              • Provisions and Plans Made for Later Life

                                                • 57% of over-45s have written a will
                                                  • Figure 31: Types of later life plans or provisions made or intending to make, 2022
                                                • Merely one in five have made provision for their funeral
                                                  • Many people just need a nudge
                                                    • Figure 32: Types of later life plans or provisions made, by those who have made a will and those who have taken advice, 2022
                                                  • A quarter of 55-64 year olds intend to seek pension or investment advice
                                                    • Figure 33: Types of later life plans or provisions made, by age, 2022
                                                  • Many people need to revise their will as circumstances change…
                                                    • Figure 34: Intentions to update a will or seek further advice within the next 12 months, 2022
                                                  • …prompting new advice needs
                                                    • Advisers set to see increased demand
                                                      • Figure 35: Types of later life plans or provisions intending to make within the next 12 months, by age, 2022
                                                    • 5% of homeowners aged 55+ have an equity release plan
                                                      • Figure 36: Proportion of over-45 homeowners who have taken out an equity release scheme or who plan to, by age, 2022
                                                  • Awareness and Understanding of Lasting Power of Attorney

                                                    • Good awareness of lasting power of attorney among over-45s
                                                      • Figure 37: Awareness of lasting power of attorney, 2022
                                                    • Most people know that an LPA needs to be officially registered
                                                      • Figure 38: Assessing understanding of lasting power of attorney, 2022
                                                    • A large minority are not aware that there are two types…
                                                      • …or that an LPA can be cancelled
                                                        • Figure 39: Assessing understanding of lasting power of attorney by those who have set it up, 2022
                                                      • Some people will need further advice after setting up an LPA
                                                      • Impact of Rising Inflation on Later Life Plans

                                                        • Many over-45s are concerned about rising inflation affecting later life plans…
                                                          • Figure 40: Level of concern about rising inflation affecting later life plans, by age, 2022
                                                        • …especially their ability to save
                                                          • Figure 41: Ways in which rising inflation will affect later life plans, by age, 2022
                                                        • 11% of homeowners aged 45+ are forced to consider downsizing
                                                          • Figure 42: Way in which rising inflation will affect later life plans for homeowners, by age, 2022
                                                        • Around a fifth of working over-45s expect to postpone retirement
                                                          • Figure 43: Way in which rising inflation will affect later life plans for those in work, by age, 2022
                                                        • Half of 45-54 year olds are not confident of being financially secure in later life
                                                          • Figure 44: Level of confidence in being financially secure in later life, by age, 2022
                                                      • Attitudes towards Later Life Planning and Financial Security

                                                        • 38% of over-45s are ‘living for today’ and ‘not worrying about the future’
                                                          • Figure 45: Agreement with statements about later life planning and financial security, by age, 2022
                                                        • 81% have someone they trust to take care of their financial affairs should they be unable to…
                                                          • …and yet just 53% have discussed later life plans with loved ones
                                                            • 85% of parents aged 45+ want to leave a financial legacy to children or grandchildren…
                                                              • …which, for some, could conflict with a desire to leave wealth to charity
                                                              • Appendix – Abbreviations, Data Sources and Supporting Information

                                                                • Abbreviations
                                                                  • Sources
                                                                    • Consumer research methodology
                                                                      • Definitions
                                                                        • Other definitions

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