What are providers doing to help mid-lifers?

According to Standard Life, adults in this age group demonstrate higher engagement levels compared to those in other ages and are likely to pay more into their retirement pots.

“Not only is this a customer audience that is particularly open to receiving support at this life stage, they are also an age group where we feel that we can make a big difference,” says Neil Hugh, head of strategy and development at Standard Life.

“We provide a range of support through digital, telephony, and paper-based channels to help mid-lifers make sense of their products and the options available to them.”

Pension calculators and similar digital tools can be useful for advisers to use with mid-lifer clients to understand what they might be on track for and start to pull together a plan.Tony Vail

The life company’s focus on this demographic is typical of providers in its market, and makes sense given the higher level of awareness and response.

Typically, Standard Life begins sending five-yearly pre-retirement communications to its customer base from the age of 49 until they decide to access their cash. It supplements these communications with digital tools, blogs and roadshows to hit home the importance of retirement planning during this crucial phase.

One of the most useful tools that providers can offer the end client, according to experts, is the ability to log in and view their accounts and review literature all in one place.

“Most providers are looking at online portals where customers can log in to view their accounts and administer them,” explains Niral Parekh, head of UK retail asset and wealth management at Capco. “This can also help with overall engagement if planning tools are included.”

Mr Parekh adds that while consumers in this demographic typically have access to digital tools to help them plan, some are suspicious of providers who recommend their own ‘tied’ advisers.

“Consumers may be suspicious of providers recommending advisers, given these advisers are restricted,” he says.

“Providers who are truly championing the cause of the mid-lifers train their advisers in providing investors with engaging content and information to make them truly understand their options, rather than ‘shoe-horn’ them into a product, given this practice is looked at scornfully by the FCA.”

Adviser tools

Consumers seeking a truly impartial view, then, may turn to an independent financial adviser for a further appraisal of their position and planning.

Intermediaries, too, have seen growth in the number of digital tools to assist them in recent years.

Retirement calculators, risk questionnaires, drawdown planners, Isa calculators, and pensions lifestyle projection tools are among the digital support services to have emerged. 

“Pension calculators and similar digital tools can be useful for advisers to use with mid-lifer clients to understand what they might be on track for and start to pull together a plan,” acknowledges Tony Vail, chief investment officer at online financial planning group Wealth Wizards.

“However, it can be hard for clients to make sense of tools if they don’t have accurate data to input, and it can be hard to build real confidence in what action to actually take – which is where an adviser can really help.”

Improving engagement

Despite the wide range of digital tools on offer to support intermediaries reviewing the retirement plans of this age group, some experts claim providers could do more.

Jon Dean, head of retirement strategy at Altus Consulting, says pension products remain “quite generic”, with firms wedded to “accumulation” and “decumulation” as two main phases.

As an industry, we need to get more people engaged in pensions and planning for retirement.Emma Douglas

He believes providers could do more to go beyond their current focus, which he says, are on those with higher earnings or initial wealth.

He says: “Many of this generation are the ‘squeezed middle’ and really need help to become the next wave of wealth retirees. Auto-enrolment on its own will not help to fill the shortfall.”

Mr Dean adds that the next few years could see considerable changes, though, as mass market providers and master trusts accumulate larger numbers of mid-lifers and pot sizes start to become meaningful.

Legal & General Investment Management (LGIM) is among those providers planning to do more in the years ahead. To its credit, it acknowledges that there is more that the industry can do to increase engagement and prepare people for retirement.

“As an industry, we need to get more people engaged in pensions and planning for retirement,” suggests Emma Douglas, head of DC at LGIM.

“We’re big supporters of the mid-life MOT at Legal & General. It’s a great way for consumers to take stock of their personal finances at 45 or 50 and to really think about the type of life they want to lead after full-time work.

"However, it’s not just about saving enough and building a nest egg for later life.”

Joe McGrath is a freelance financial journalist