- ‘Free’ university education is no more, with most young people expecting to take out a student loan as well as get help from their parents with the costs of living and studying away from home.
- Parents are still concerned with helping their children save for a deposit for their first homes, but typically deposits are no longer small and children ‘fly the nest’ much later, as high rents and high house prices make leaving home less affordable.
- There is a high likelihood that mortgages will continue up to, and even through, retirement as the ‘baby boomers’ come under pressure not only to help their children with studying and housing, but also because they may have elderly parents to support.
- Interest rates are low, making saving less attractive, but borrowing more so.
- Final salary schemes are, in the main, long gone, so now most have defined contribution pensions, typically with lower employer contributions, and new pension freedoms offer (quite complex) investment and other options.
- Financial confidence and knowledge is still low, but with the changes in pension provision, many more will have to grapple with how they are going to fund their retirement and the various options on offer.
- Does financial advice still focus on Dad? Potentially, but that needs to change.
- It is no longer the case that men are always the main breadwinners. While women are more likely to take time off to have children, and to work part-time while their families are young, we also now have the availability of shared parental leave, flexible working (for both parents) and far more career options for women. Although, of course, the pay gap remains. Research by UBS shows that women are making many more of the family’s financial decisions. When you are advising a client, do you include their partner in the discussions, or suggest it?
Is financial advice taking all of this into account?
As well as considering your clients' current situation, you may need to help them adjust their expectations of what life in their 50s, 60s and beyond, will look like.
Managing our money for a longer life
As life expectancy increases, so does the number of older people in our population.
The Office for National Statistics (ONS) data tells us that one in every five people (18.2 per cent) in 2017 were 65 or older and this is projected to reach around one in every four people (24 per cent) by 2037.
That is not ‘news’. Everyone knows we are living longer, but there is also a higher likelihood of living with impaired health for longer – potentially without appropriate healthcare or care support in place, and/or without the money to fund it.
