The industry’s approach to retirement planning is leaving retirees with regrets, suggesting a different approach is needed, according to a new report from 7IM.
In a survey of 505 fully or semi-retired over-55s, which set out to gain a clear understanding of the issues impacting the at and in-retirement market in the UK, a third (32%) of UK retirees said they would make different financial decisions about their retirement savings if they had the opportunity to go through the process all over again.
One in three (30%) said if they were to go through retirement again, they would ensure they have greater guarantees on their income, while 20% would take less from their savings in cash upfront and the same number would look for a tax-efficient approach. In addition, 19% said they would opt for greater flexibility.
Verona Kenny, managing director, intermediary at 7IM, said the industry must do better for clients to ensure that they have greater retirement income flexibility.
Kenny said: “As an industry we need to respond to this feedback, we need to innovate and get it together for clients. The number of clients who would make different choices suggests that as an industry we still haven’t got it together to offer robust, yet flexible, solutions that deliver the right outcomes for advisers and their clients.
“It also clearly shows that advisers have the toughest role to play with their clients – being the trusted financial expert and also managing all the behaviour elements when it comes to retirement planning. As product providers and platforms, we need to work harder to deliver flexible solutions to advisers for their clients.”
Kenny said the trend showing the number of those expressing regret at the decisions made increases as the age of the retirees decreases, suggests that needs and expectations are changing more rapidly than expected.
Kenny added: “If, as an industry, we fail to bring about the change people want, how many of the next generation of retirees will have regrets? We need to get it together as an industry to really deliver for clients the income solutions they need in retirement. And I don’t mean one provider delivering one hot new product, but as an industry delivering together.”
