Retirement is no longer a fixed point in time; it’s a complex and evolving phase of life. The traditional model of retiring with a guaranteed income from a defined benefit pension is increasingly rare.
Instead, we now have a generation of retirees navigating a landscape shaped by market volatility, shifting tax regimes and rising living costs.
However, when you ask someone what a typical retiree is, their answer will probably depend on their age and political persuasion. For some, retirees are vulnerable members of society that require protecting, while others may see a generation who has benefited from rising asset prices and continue to unfairly benefit from things like the triple lock.
Retirees and pensioners evoke a mix of social, economic and cultural associations, but the fact of the matter is that there is no single type of retirement.
Our recent research into the lived experience of retirement paints a nuanced picture.
Inflation, policy changes and income erosion are all contributing to a sense of vulnerability
On the surface, many retirees appear financially stable. Average household income sits at around £35,000, broadly in line with the average UK salary. Annual spending averages £22,140, with housing, groceries and holidays accounting for the bulk of expenditure.
But beneath these figures lies a deeper story of uncertainty and uneven access to financial support.
Many retirees express concern about their ability to maintain their current standard of living in the face of economic pressures. Inflation, policy changes and income erosion are all contributing to a sense of vulnerability.
Even with the 8.5% rise in the state pension last April, the average overall income uplift was just 1.34%, well below the rate of inflation.
What’s clear from the inaugural Quilter Retirement Lifestyle Report, which surveyed over 5,000 UK retirees, is that financial advice plays a pivotal role in shaping what retirement looks like for someone.
Retirees who receive financial advice are significantly more confident and better prepared. They’re more likely to have diversified income streams, tax-efficient strategies and a clear plan for managing their assets.
Nearly two-thirds of those currently taking advice saw an increase in their household income over the past year
They’re also more responsive to changes in their financial environment – whether that’s adjusting pension drawdown, gifting to family, or planning for inheritance tax.
Among advised retirees, satisfaction with household income stands at 84%, compared with just 41% of those who have never sought advice. Nearly two-thirds (61%) of those currently taking advice saw an increase in their household income over the past year – almost double the proportion in the general retirement population.
These are not marginal gains, but meaningful improvements in financial resilience.
Changes in government policy have spurred action among retirees, with more than 60% of retirees planning to act to pass on their assets in the most tax-efficient way. Seven in ten of those receiving advice have already altered or are considering changes to their estate planning strategies in response to changes concerning pensions and IHT.
The contrast with the unadvised majority is stark. Many of these individuals are responding to financial pressures by cutting back on discretionary spending, reducing support to family, or even reconsidering their retirement plans altogether.
However, our data shows that only 43% of retirees currently receive advice, and among lower-income groups, that figure drops to 15% or less. Forms of financial advice or support should not be a luxury.
Whether people are unable or unwilling to access financial advice, targeted support should take great strides in bridging that gap
As such, we welcome the FCA’s proposals for a targeted support regime, which could help bridge the gap between full advice and no support at all. Implementation must be inclusive, practical and swift to ensure retirees have access to the support they need to make informed decisions.
There are many reasons why people don’t seek financial advice. But whether people are unable or unwilling to access financial advice, targeted support should take great strides in bridging that gap.
Delivered alongside pre-retirement “wake-up” packs, it could be transformative. For many, this may provide enough clarity and confidence to make key decisions. For others, it may highlight the need for full ongoing advice.
Either way, the benefits to individual resilience and broader economic stability could be substantial.
While no retirement experience is the same, it is clear advised retirees are more confident and better equipped to enjoy this time on their own terms.
We now have an opportunity to reshape the retirement experience for the better and ensure that more people can face the future with clarity and confidence.
Steven Levin is CEO of Quilter
