Challenging outdated portrayals of retirement
Challenging outdated portrayals of retirement
If, like most, your view of retirement living was that of staying in your own home until such a point you needed support, then moving to some form of assisted living or perhaps some retirement village where there were orange emergency pull cords in the bathroom, a warden on site and a community lounge, before finally having to move into a care home where you are waiting to pop your clogs, then you’ve a lot to learn.
Recently, M&G launched its campaign to “change the conversation” around later life by challenging these outdated portrayals of retirement, and Riverstone has been leading the charge on its approach to retirement living.
M&G managing director of individual life, Anusha Mittal, said: “The way later life is currently being portrayed is not realistic, aspirational or reflective of how people are now living… and how people are enjoying their later years is currently misrepresented”.
Riverstone’s approach is so far removed from the typical outdated stereotype it’s hard to imagine without experiencing it for yourself. Riverstone believes advisors can play a big part in positively framing this chapter of life and enabling clients to live a more fulfilling retirement, just with a little bit of extra knowledge.
M&G found 72 per cent of customers believe retirement needs to be portrayed in a more accessible way, which is hardly surprising as the UK’s character is to avoid talking about prickly subjects like death (and one’s journey towards it).
So, imagine explaining to a client how you could help them avoid ever having to move into a care home. Or that they would not have to play bingo in a community lounge with some random people. Instead, they could go on organised trips to private gallery events, or to the theatre with like-minded residents. In fact, their lifestyle could be enhanced and their wellbeing improved by being better informed of the options available to them.
Imagine if the person who provided that golden key was you. You not only helped them financially but also enabled them to see the opportunities of a significantly different retirement than they thought possible.
Isn’t it time to know a lot more about retirement living?
Financial Planning. Going further, helping clients with wellbeing & retirement living
The FCA promotes holistic advice – tax, care needs and inheritance, urging advisors to provide an increasing level of “wrap-around service” with Consumer Duty focusing on truly understanding and advising clients’ unique needs.
But what does this mean? Over recent years, we’ve seen the market continue to change (for good), improving its customer-focused development. A big step forward came in 2012 with RDR’s focus, which brought firms into much greater alignment, then, more recently, the consumer duty came into effect in 2023, with the deadline last year (2024). The focus of this is on consumer outcomes, and firms initially spent time on the more tangible aspects, such as Governance, Products & Services, Price & Value, before turning to Vulnerability, then Consumer Understanding & Consumer Support. As they went through this journey, firms started to try and find differentiators as they became more aligned. We have seen greater focus more recently in changing the conversation around later life planning by challenging outdated portrayals of retirement, going further than before and helping clients with areas such as Wellbeing.
Financial Planning & Retirement Living
When dealing with clients in accumulation, it’s an easier conversation talking about life events such as University Fees or Dream Holidays. It’s also an area that’s quite fluid and easier to navigate with changes. However, moving into retirement is a harder conversation.
By that stage, people have accumulated wealth, and it’s about preservation to ensure they can live out their life comfortably. But talking about what their client will do should they get to the stage that they can’t walk up the stairs or must move into a care home is a different matter. Many advisors simply brush over this, assume the client will live in their own home up until moving into a care home and thus model this scenario up to 100 with a client being in a care home for 5 years. Isn’t that poor?
So, the simple question – is this good enough? What should advisors know about later living, and how far should they go into incorporating this into the guidance or advice they give? Where does the boundary lie between it being around the financial element and their client’s wellbeing? I.e. die with £1M in the bank, having lived a boring retirement or die with £1 in their pocket, having lived an enjoyable and fulfilling retirement?
Here are a few of the questions one could pose regarding advisors’ knowledge around retirement living, such as:
- Do advisors know the difference (and benefits) between Independent Retirement Living, Retirement Housing and Care Homes? (There is a clear distinction.)
- Do advisors know the tax differences or benefits of each? e.g. certain costs falling outside of the estate, hence being exempt from IHT?
- What living options do advisors discuss when reviewing how & where clients plan to live in retirement?
- Do advisors consider not just clients’ finances but their wellbeing and lifestyle?
Better informed, better serving clients
There is a benefit to advisors being better educated in regards later living options and their implications, what it means financially, planning around this and helping clients navigate this area.
Further, understanding what “care” is given and what is actually provided could see advisors suggesting better alternative options for their clients. This could not only help financially but also mentally. Equally, understanding financial models where certain elements (around 30%) of retirement living options fall outside of the client’s estate could help with IHT planning.
Riverstone is leading the way in educating advisers on this subject and supporting better client conversations. As awareness grows, so will better retirement outcomes.
