Some 68 per cent of advisers are seeing clients work longer or choosing to defer access to their retirement savings as they battle with the cost of living.
Research from NextWealth, commissioned by Aegon, found the current economic environment is causing widespread change in retirement behaviours.
It revealed 59 per cent of advisers have seen clients reviewing the amount and/or timing of passing wealth to the next generation.
While 53 per cent said clients were looking to guarantee some income through a combination of an annuity and drawdown.
Steven Cameron, pensions director at Aegon UK, said: “The research paints a picture of many clients changing their behaviour around retirement, but in a wide variety of ways.
“This shows the important role advisers play in tailoring their advice to individual needs and preferences, particularly amongst those approaching or in retirement.
"This further emphasises that for many people in or approaching retirement, their ‘Second 50’ can be uncharted territory.”
David Gibb, financial planner at Quilter Cheviot said that clients adopting a mix-and-match approach when planning how to take income during retirement was becoming more popular.
“Combining different options like annuities, which provide a steady income, with drawdown plans, which allow for more flexibility, is becoming more popular among clients. This mix-and-match approach shows how individuals are looking for both security and growth in their retirement plans.”
The report highlighted that 53 per cent of advisers have seen clients reduce their level of investment risk however 36 per cent did see clients take the opposite course, potentially to seek higher returns.
Mix-and-match approach shows how individuals are looking for both security and growth in their retirement plansDavid Gibb, Quilter CheviotBen Barratt, managing director at First Sentinel Wealth said it was expected that clients would be feeling the pinch due to lower returns of investment and high levels of inflation that everyone has currently been experiencing.
He also said the “brutal adjustment” in the bond market has also been a contributing factor to delaying retirement for clients who were invested in it.
“There has also been a clear increase in the value of withdrawals from individuals who are already retired as they try to maintain their standard of living through the inflationary shock we have witnessed, with ad-hoc withdrawals becoming far more common as they try to keep up with price pressures,” he added.
Gillian Hepburn, commercial director at Benchmark said the Schroders Adviser Survey drew an even starker picture with 89 per cent of advisers reporting that clients adjusted their retirement plans as a result of the cost-of-living crisis.
With higher household expenses were cited as a key reason, with increased mortgage payments and helping family also prioritised.
“Worryingly, 35 per cent of advisers told us that some clients had stopped or reduced making payments into their pension. Whilst this can relieve short-term financial pressures, it can have a significant impact on the capital ultimately available to fund a retirement, so seeking advice becomes even more important,” she added.
Susan Hop, retirement expert at Scottish Widows also stressed the immense value advice will provide to clients making these retirement changes.
She said: "With people living longer and working for longer the concept of a ‘cliff-edge retirement’ needs rethinking, the research seems to indicate this, and advisers will play a key role in developing this new model."
alina.khan@ft.com
