The retirement market will be disrupted by the growth of Late Financial Bloomers, according to new research from Canada Life.
This group – so called because they secure their financial stability later in life – currently make up 6% of the retirement market but this figure is expected to grow significantly over the next 15 years.
Socio-economic factors, such as later access to home ownership, coupled with marrying and having children later in life, is driving the growth in this group, the retirement specialist said.
The research, carried out in partnership with forecasting agency Trajectory, found that achieving milestones later in life will have an impact on retirement savings, with late financial bloomers expected to have less wealth when they reach retirement age and may have to work longer as a result.
Canada Life says advisers will have to plan ahead for the changing demographics and adapt existing models to meet their needs.
Paul Flatters, co-founder and CEO at Trajectory, said: “The rise of individualism and decreasing relevance of the social norms are driving the growth of these new groups of retirees. As the timing of home buying, marriage, divorce and having children becomes increasingly flexible for most people, its impact on the journey towards retirement and the finances needed for retirement is being felt too.”
Andrew Tully, technical director at Canada Life, added: “The retirement market will be disrupted by the growth of Late Financial Bloomers; a group which only makes up a fraction of the current market but will account for a much larger proportion by 2035. These retirees are more likely to have less wealth when they reach the ‘typical’ retirement age and, as a result, may have to work later in life and think differently about their assets and financial planning.
“The adviser community needs to plan ahead to respond to these changing needs, considering more complex retirement journeys and adapting existing models and services in order to support this growing group.”
