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Retirement income and inheritance ‘balancing act’

27 September 2020

Advisers face a balancing act managing clients’ desire for retirement income with their inheritance aspirations, new research from Aegon has shown.

Over half (55%) of advisers say creating a sustainable lifetime income is the main objective for the majority of their clients, while a fifth (19%) say passing on savings to loved ones is their main concern.

The research also found that one in 10 (10%) advisers say the majority of their clients want to use their retirement savings to withdraw ad hoc lump sums but just 1% of advisers say the majority of their clients want to completely withdraw their retirement savings over a short time frame, the same proportion as last year’s survey.

Steven Cameron, pensions director, Aegon, said: “Decisions around when and how to take a retirement income are challenging and external influences feed heavily into the planning process. The government’s anticipated new plans for social care funding, for example, have significant implications for retirement aspirations as people need to know how much they are expected to pay themselves should they need care in later life.

“As we have seen over the last six months, a volatile stock market can also affect decisions, with individuals right to avoid taking large sums of money from their pension when fund values are depressed.

“In these times of great uncertainty, pension freedoms can give individuals huge flexibility over how to use their retirement savings, but this comes at significant risk and advisers are ideally placed to help individuals navigate their competing aspirations.”

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