Ageing populations and pensions – a recipe for disaster?

  • 13th May 2019

With more people working past state pension age, the pension reforms in 2015 provided more flexibility for us to access and manage our pension investments. Whilst those reforms have provided greater flexibility, they cannot take into account the demographic changes affecting society. The Office for National Statistics (ONS) reports that 32% of females and 21% of males already born will reach into their 90’s. With pensions pots aiming to provide the financial security through to the age of 85 (depending on your spending habits), those fortunate enough to reach past this age, could find themselves in the unfortunate position of having an empty pension pot.

Many families are also facing the prospect of having children living at home for longer, which means the option of putting some extra cash into investments when the kids flee the nest are being put on the backburner.

So, what impact is our life expectancy having on our personal financial planning?

Keith Pearson IFA at Forrester Boyd Wealth Management looks at the impacts of an ageing population on our finances, pensions, investments and the need to regularly review investment strategies to ensure that you have the financial support that you need into your 90’s.

Your retirement funds will potentially need to last you for longer, but what is your ‘lifestyle plan’ for retirement and will your investments last and deliver the same quality of life that you anticipate?

Living into later years is also seeing an increase in the number of people suffering from age related illnesses such as dementia according to the Alzheimer’s Society. Does your ‘lifestyle plan’ include care home planning?

You spend all your working life, trying to ensure that you have enough money saved to provide a comfortable retirement and planning your inheritance for your family. You want the same quality of life that you had whilst you were working, if not better and you want that to last you through your retirement whilst safeguarding your assets and inheritance.

Pension reforms in 2015 provided investors with a greater flexibility over their plans. This has seen a shift from annuities to drawdown but working out a sustainable rate at which to withdraw funds from your pension is a challenge that some people get completely wrong, leaving them with a potential funding gap.

What is your ‘lifestyle plan’?

You need to prepare and adapt for later life so a review of your investments, savings and pensions could help to ensure that you can continue to live the life you want throughout your extended retirement years.

Speaking with a financial adviser to review your ‘lifestyle plan’ and investment strategy will help to provide you with plan to cope with the challenges and changes of life.

Contact Keith today to discuss your plans and objectives.

Forrester Boyd Wealth Management Limited is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate advice on Trusts, Taxation or Will writing Services.

Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.

Information contained within this article is not a personal recommendation of Forrester Boyd Wealth Management. The wording in this article is not to be construed as an offer or advice. We recommend you seek advice concerning suitability from your investment adviser.