Retirement plans highlight need for regular income

A study found that, on average, advisers expect 43% of their clients to work past standard retirement ages

The evolving landscape of retirement plans is underlining the need for advisers and their clients to make their investments work harder for them, according to HSBC Life (UK).

Its study found that, on average, advisers expect 43% of their clients to work past standard retirement ages.

Moreover, they expect 29% of their clients to retire abroad, with HSBC Life saying that these evolutions highlighted how advice and the use of investable capital need to adapt to help support clients with achieving their plans.

Nearly half (44%) of clients working with advisers expect to work beyond normal retirement ages, increasing to 64% of those aged between 35 and 45.

Nearly a quarter (24%) of advisers’ clients expect to or plan to retire abroad.

HSBC Life said the findings underscored the need for income from investments, with advisers estimating that nearly 45% of their clients have a current requirement to generate income from their investments and that 42% are drawing on capital instead of natural income.

The idea of a standard retirement age linking in with state pension age still resonates, stated HSBC Life (UK) head of onshore bond distribution, Mark Lambert.

It is a reasonable point in time to be used in financial planning where an adviser’s client is not ready to confirm precisely when they wish to stop working, but clearly the landscape is changing and will continue to change as will views on retiring overseas, he said.

Lambert added: The growing shift in retirement attitudes is part of the evolving way that people plan for retirement and how they use investment vehicles other than pension products in that process.

He said: Being able to generate a tax-efficient income, for instance, through tax effective wrappers such as onshore bonds could well contribute to the answer.