2020
9
Later Life Financial Planning Market Report 2020
2021-01-13T03:03:38+00:00
OX989590
2195
131176
[{"name":"Financial Services","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services"}]
Report
en_GB
“COVID-19 has been a crisis of later life health but has not caused a crisis of later life finances. Consumers’ financial planning for their later years is still focussed on…

Later Life Financial Planning Market Report 2020

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the Later Life Financial Planning UK market including the behaviours, preferences and habits of the consumer.

53% of over-50s who are yet to retire are unable to estimate what proportion of their current income they will need to maintain when they stop working to have a comfortable retirement. This lack of understanding is coupled with a widespread lack of confidence about having sufficient income in retirement as 50% do not think they will have enough for a comfortable retirement.

COVID-19 has focussed minds on immediate concerns, and there is a risk that it could lead people to neglect longer-term planning. However, it has also made people more conscious of their vulnerability to ill health as they get older. 22% of over-50s have reassessed their later life plans as a result of the pandemic.

Quickly understand

  • The impact of COVID-19 in later life financial planning.
  • Over-50s’ consideration of later life financial planning and the sources of information used.
  • Barriers to over-50s’ use of financial advice to make later life financial plans.
  • Over-50s’ priorities for later life financial planning and expectations of future income needs.
  • Preferences for who over-50s would trust to take care of their affairs in later life if they are unable to.
  • Consumer attitudes towards later life planning, including confidence in achieving a comfortable lifestyle.

Covered in this report

Companies featured in this report: Sunlife, Royal London, Age Partnership, Key Retirement Solutions, Neilson Financial Service, Legal & General Group and many more.

Expert analysis from a specialist in the field

Written by Richard Shepherd, a leading analyst in the Finance sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

COVID-19 has been a crisis of later life health but has not caused a crisis of later life finances. Consumers’ financial planning for their later years is still focussed on ensuring sufficient income and staying in their home for as long as possible. Long-term care needs, however, remain largely neglected. This is something that must be addressed by brands and authorities.
Richard Shepherd
Associate Director – Financial Services

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Economic and other assumptions
          • Executive Summary

              • Impact of COVID-19 on later life financial planning
                • Figure 1: Short-, medium- and long-term impact of COVID-19 on later life financial planning, December 2020
              • The market
                • The average retirement will last more than two decades
                  • Figure 2: Life expectancy of males and females at age 65, 2018-based period and cohort projections, 1981-2068
                • A quarter of over-50s have more than £100,000 in savings and investments
                  • Figure 3: Value of savings and investments, consumers aged 50+, November 2020
                • Companies and brands
                  • Equity release trends move towards debt repayment and gifting
                    • Figure 4: Uses of equity release based on value of plans taken out, Q1 2020-Q3 2020
                  • Innovations in digital applications and product changes
                    • A sharp fall in advertising expenditure
                      • Figure 5: Total above-the line, online display and direct mail advertising expenditure on later life planning products, 2015/16-2019/20
                    • The consumer
                      • Half of over-50s have made later life financial plans
                        • Figure 6: Consideration of later life financial plans, September 2020
                      • Friends and family are the top choice for discussing plans
                        • Figure 7: Sources of information consulted in relation to later life financial plans, September 2020
                      • Advice is not a consideration for most without a prior relationship
                        • Figure 8: Plans to speak to a financial adviser about later life finances in the future, September 2020
                      • Two thirds don’t think they need an adviser
                        • Figure 9: Barriers to consulting a financial adviser about later life financial needs, September 2020
                      • Half of over-50s have no clue what income they will need in retirement
                        • Figure 10: Percentage of current income expected to be needed for a comfortable lifestyle in retirement, September 2020
                      • Securing later life income is the top priority
                        • Figure 11: Later life financial priorities, September 2020
                      • Financial decisions are most likely to be kept in the family
                        • Figure 12: Trust in other people to handle financial affairs in later life, September 2020
                      • More than a fifth have reassessed later life plans due to COVID-19
                        • Figure 13: Attitudes towards later life planning, September 2020
                    • Issues and Insights

                      • More than a fifth are reassessing their later life plans due to COVID-19
                        • The perceptions of advice and guidance must be improved
                          • Care costs are still being sidelined for more immediate concerns
                          • The Market – Key Takeaways

                            • COVID-19 has been a crisis of later life health
                              • Longer retirements mean more complex needs
                                • Pensions Dashboard pushed back to 2023
                                • Market Environment

                                  • Impact of COVID-19 on later life financial planning
                                    • Figure 14: Short-, medium- and long-term impact of COVID-19 on later life financial planning, December 2020
                                  • COVID-19 has been a crisis of later life health
                                    • Figure 15: Number of deaths involving COVID-19 in England and Wales, by sex and age, registered 28 December 2019-30 October 2020
                                  • More than half a million over-65s received long-term care last year
                                    • Figure 16: Number of clients aged 65+ accessing long-term support in England, 2018-19
                                  • The average retirement will last more than two decades
                                    • Figure 17: Life expectancy of males and females at age 65, 2018-based period and cohort projections, 1981-2068
                                  • Employment of over-65s has more than doubled in 20 years
                                    • Figure 18: Employment rate (three-month average), by age, July-September 1992-July-September 2020
                                  • A quarter of over-50s have more than £100,000 in savings and investments
                                    • Figure 19: Value of savings and investments, consumers aged 50+, November 2020
                                • Regulatory and Legislative Changes

                                  • Over-70s have faced the strictest COVID-19 guidance
                                    • COVID-19 has brought the viability of the triple lock into question
                                      • Pension freedoms age to rise to 57
                                        • Pensions Dashboard pushed back to 2023
                                          • CMA report finds concerns but stops short of major funerals reform…
                                            • …while the FCA has highlighted equity release advice problems
                                              • MaPS to launch post-COVID ‘later-life checklist’
                                              • Companies and Brands – Key Takeaways

                                                • A rise in gifting as a driver for equity release
                                                  • COVID-19 has pushed providers to innovate in digital channels
                                                    • Advertising in the pandemic has raised challenges over tone
                                                    • Competitive Strategies

                                                      • Equity release trends move towards debt repayment and gifting…
                                                        • Figure 20: Uses of equity release based on value of plans taken out, Q1 2020-Q3 2020
                                                      • …as new plans have come to market at a rapid pace
                                                        • Royal London and LV= both launch new products as merger talks continue
                                                          • Innovations in digital applications and product changes
                                                            • Educating advisers, as well as consumers, is key
                                                              • free2 launches unsecured loan product for over-55s
                                                                • Funeral firms see COVID-19 incomes boost
                                                                • Advertising and Marketing Activity

                                                                  • A sharp fall in advertising expenditure
                                                                    • Figure 21: Total above-the line, online display and direct mail advertising expenditure on later life planning products, 2015/16-2019/20
                                                                  • Sunlife accounted for a quarter of adspend in the last year
                                                                    • Figure 22: Top 15 advertisers of above-the line, online display and direct mail advertising expenditure on later life planning products, 2017/18-2019/20
                                                                  • Nielsen Ad Intel coverage
                                                                  • The Consumer – Key Takeaways

                                                                    • More than a fifth have reassessed later life plans due to COVID-19
                                                                      • Half of over-50s have made later life financial plans
                                                                        • Financial advice struggles for mainstream relevance
                                                                          • Half of over-50s have no clue what income they will need in retirement
                                                                          • Impact of COVID-19 on Consumer Behaviour

                                                                            • Over-55s have the greatest concerns about exposure to COVID-19
                                                                                • Figure 23: People’s level of concern about the risk of being exposed to COVID-19, by age, 10-19 November 2020
                                                                              • COVID-19 has had little impact on older groups’ financial wellbeing
                                                                                  • Figure 24: Current financial wellbeing, by age, February 2020 vs November 2020
                                                                                • Half of over-65s have been untouched financially by the outbreak…
                                                                                    • Figure 25: How consumers have been affected or changed their behaviour as a result of the outbreak, by age, 10-19 November
                                                                                  • …and financial confidence has grown
                                                                                    • Figure 26: Financial confidence for the coming year, by age, February 2020 vs November 2020
                                                                                • Consideration of Later Life Financial Plans

                                                                                  • Half of over-50s have made later life financial plans
                                                                                    • Figure 27: Consideration of later life financial plans, September 2020
                                                                                  • Housing stability is a boost to prioritising later life finances
                                                                                    • Figure 28: Consideration of later life financial plans, by housing situation, September 2020
                                                                                • Sources of Information Used

                                                                                  • Friends and family are the top choice for discussing plans
                                                                                    • Figure 29: Sources of information consulted in relation to later life financial plans, September 2020
                                                                                  • Pensions are the key point of contact
                                                                                    • A third have spoken to an adviser, but further penetration will be difficult
                                                                                      • Figure 30: Plans to speak to a financial adviser about later life finances in the future, September 2020
                                                                                  • Barriers to Consulting a Financial Adviser

                                                                                    • Two thirds don’t think they need an adviser
                                                                                      • Figure 31: Barriers to consulting a financial adviser about later life financial needs, September 2020
                                                                                    • A third of undecided advice users think it is unaffordable
                                                                                      • Figure 32: Barriers to consulting a financial adviser about later life financial needs, by plans to speak to a financial adviser about later life finances in the future, September 2020
                                                                                  • Expectations of Later Life Income Requirements

                                                                                    • Half of over-50s have no clue what income they will need in retirement
                                                                                      • Figure 33: Percentage of current income expected to be needed for a comfortable lifestyle in retirement, September 2020
                                                                                    • Expected needs increase as retirement nears
                                                                                      • Figure 34: Average percentage of current income expected to be needed for a comfortable lifestyle in retirement, by age, September 2020
                                                                                  • Later Life Financial Priorities

                                                                                    • Securing later life income is the top priority
                                                                                      • Figure 35: Later life financial priorities, September 2020
                                                                                    • Death and incapacity become bigger considerations as people age…
                                                                                      • Figure 36: Later life financial priorities, by age, September 2020
                                                                                    • …but long-term care remains a minority concern
                                                                                      • Wills, care and Power of Attorney are key prompts to making plans
                                                                                        • Figure 37: Later life financial priorities, by consideration of later life financial plans, September 2020
                                                                                    • Trust in Others to Handle Later Life Finances

                                                                                      • Financial decisions are most likely to be kept in the family
                                                                                        • Figure 38: Trust in other people to handle financial affairs in later life, September 2020
                                                                                    • Attitudes towards Later Life Planning

                                                                                      • More than a fifth have reassessed later life plans due to COVID-19
                                                                                        • Figure 39: Attitudes towards later life planning, September 2020
                                                                                      • Maintaining independent living is a universal priority
                                                                                        • A mixed view on later life…
                                                                                          • …and an understanding that retirement is not a single lifestage
                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                              • Abbreviations
                                                                                                • Consumer research methodology

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