Has the pandemic changed your retirement plans?
A survey carried out at the end of 2020 by the MoneyHelper suggested that a third of 50- to 70-year-olds have had their finances impacted by COVID-19.
Meanwhile, our recent survey of 1,006 high net worth individuals in partnership with YouGov found that 16% planned to delay their retirement as a result of the pandemic, whether for financial reasons (9%) or to take advantage of the new hybrid working model (7%).
As we return to a new kind of normal, it’s becoming apparent that the changes we’re learning to live with go beyond facemasks and social distancing. Our financial wellbeing and plans for the future may now have to change too.
Is it time to see the impact of the pandemic as an opportunity to take stock and reassess your plans for retirement?
How have our clients’ financial plans for retirement changed?
The pandemic has certainly motivated many of our clients to reassess their financial wellbeing and future plans:
- Some clients have decided to move closer to children and grandchildren
- For others, lockdown has been an interesting experiment, showing them what their spending in later life might be like, with less travel and fewer expenses
- It has galvanised some clients into reassessing their retirement plans: they want to be able to travel – having had quite enough of being stuck at home over the last 18 months
- It has also prompted many people to write or update their wills; it may not surprise you to learn that in 2020 the UK’s largest will writing service saw a threefold increase in enquires compared to 2019.
Financial planning for retirement
To prepare for the future, you may want to consider undertaking some financial planning now. Many do not.
According to our survey, pensions and investments still make the highest contribution to retirement for HNWIs (65%), with men more likely to rely on pensions (75%) than women (55%). Yet a recent survey by insurance company LV found that 86% of adults have not checked their pension value in the last year. Even more concerning is that people planning to retire within the next five years are still not checking – 75% are unaware of their pension's current value.
Perhaps this is because so many decisions need to be made nowadays:
- When will retirement happen? When will you qualify for the state pension? Will you take or defer it? Do you want to phase your retirement from work, continuing to work part-time and gradually reducing your hours?
- How will you fund it? Most retirees will need to take income from a number of sources
- How will you take the money? Decisions need to be made about drawdown, tax-free cash (lump sum vs phased tax-free drawdown) and the effects on inheritance tax
- Could you bolster your pension with income from elsewhere? Are you making the most tax-efficient use of assets like rental property, offshore bonds and ISAs?
How our wealth planners could help with your retirement plans
As timelines around retirement change and the decisions that need to be made become increasingly complicated, wealth planning will shift from a service that helps clients reach an end goal of retirement to carrying on by a client’s side throughout retirement.
Some of the services our CGWM wealth planners provide include:
- Cashflow planning for early retirement
- Planning for the proceeds of business sales
- Investment advice for clients with significant exposure to their own company stock
- Cashflow modelling when creating a charitable trust
- Pension consolidation.
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If you think it’s time to take stock of your retirement plans post pandemic, why not consider booking a complimentary consultation with a personal wealth planner. Whether you have additional cash savings to invest, you want to retire earlier or later or simply want to make sure you have enough to live the retirement of your dreams, we can help.
Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.
The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity.
The information contained herein is based on materials and sources that we believe to be reliable, however, Canaccord Genuity Wealth Management makes no representation or warranty, either expressed or implied, in relation to the accuracy, completeness or reliability of the information contained herein. All opinions and estimates included in this document are subject to change without notice and Canaccord Genuity Wealth Management is under no obligation to update the information contained herein.
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Investment involves risk and you may not get back what you invest. It’s not suitable for everyone.
Investment involves risk and is not suitable for everyone.