Britons aged between 45 and 65 are sometimes addressed as one homogenous group by retirement providers, simply as ‘mid-lifers’.
But, like any demographic group, this 20-year age definition covers millions of people, all at different points on their retirement planning pathway. The best solutions, therefore, are just as diverse.
While the solutions for each individual may be different, the issue for most of them remains the same – they are not saving enough.
Last year, the Pensions & Lifetime Savings Association (PLSA), warned that current pensions provisions, coupled with the state pension will still be “insufficient to provide an adequate income in retirement” for most people.
In its research report entitled Hitting The Target: A Vision for Retirement Income Adequacy, it said that the retirement savings sector needs to do more to assist savers in planning and understanding “how best to meet their retirement income needs”.
Barry Davidson, head of financial planning at Dundee-based Thorntons Investments, says the mid-life period is a crucial time for retirement preparation.
“They absolutely need to be engaged at this age because they need to consider what they want retirement to look like,” he says.
“When will they retire? How much income will they need? What other assets will they have accumulated? Will they still have a mortgage or other debts?
"It pays to look at these things at this age because it is always better to have a plan.”
Flexibility and resilience
Providers and advisers, alike, agree that retirement planning for this age group is a tricky business.
“With retirement savings plans there’s always two different sets of moving parts: the pension rules, and a saver’s personal circumstances,” explains Jessica List, pension technical manager at Sipp provider Curtis Banks.
“We know how quickly either of those can change. The key is to make sure that savers are thinking about the right questions at the right time, and adapting as things change.”
Retirement experts agree that this versatility is key.
Many people will eventually retire at a different age to the one they had first envisaged. This means plans need a degree of flexibility inbuilt, to ensure they are resilient and robust to accommodate any shifts.
Research suggests, though, that all too often, this does not happen.
A poll conducted by the London Institute of Banking and Finance in 2018 found that almost half of those surveyed (48 per cent) felt they needed to save more for retirement. The poll was pretty representative, as it was conducted among 2,000 UK adults aged 50 or over.
More than a third (34 per cent) of those polled said they had now realised they will have to work longer than they had planned.
“Moving from one stage to another involves some very difficult decisions and that is why mid-life planning is so important,” explains Fiona Tait, technical director at Intelligent Pensions.