sunset outlook

The challenges facing those over 50


7IM has teamed up with the London Institute of Banking and Finance to launch the findings of new research focused on people who are on the road to retirement or have retired.

The research in particular focuses on issues faced by this audience: interest rates that have been at record lows for over a decade and the longer lives that people are living. And while each of these are issues faced across more generations, the combination of these for the 50+ age group is particularly negative.

Anyone with savings has been facing a struggle to grow these over the last decade. This is because investments use the Bank of England’s base interest rate as the benchmark for the lowest risk of all the types of assets available to savers – rates which have been at prolonged record lows. So many investments have over this period generated lower returns than was historically typical.

Meanwhile, this generation won’t necessarily believe that their savings have the time to grow significantly before they stop earning, because interest rates have yet to even begin to normalise and because pension freedoms are just three years old. It’s only since their introduction that more options become available for pensions to remain invested throughout people’s lives, regardless of whether they’re working or not. Nearly half (47%) admit they’ll have to save more for later life.

Any savings also have to last longer given the increase in the overall UK longevity – people are living longer in retirement and spending over more years. So rather than seeing their savings meet any financial goals and aspirations in the timeline they originally anticipated, almost two in five (38%) have realised that they’ll need to work longer than planned. Many more may face that same decision in the future.

This is a generation that are generally on top of their finances – 93% state they know what their bank balance is – and they enjoy an average value of ‘assets’ across all their savings and in property of £523,857. But still only half of them (50%), who haven’t retired yet, feel that they are prepared for a time when they stop work – a timeline that had already increased for most of this generation to 67 using the state pension age as a yardstick. The previous ages of 65 for men and 60 for women had been in place since 1948, only changing in 2010.

Beyond this thinking though, little action appears to have been taken. Just 5% have thought about downsizing, 8% are considering releasing equity, 8% have put in place plans to pay for long term care and only 20% of those approaching retirement (50-59) have sought financial advice.

Advocating advice and investments

Founded in 1879, the London Institute of Banking and Finance is an awarding body for professional qualifications in the finance sector; personal finance qualifications in schools and provides degrees in banking, finance and investment. 7IM was established in 2002 because the founders believed that setting up a business in which they could invest their respective families’ money was the only option that would meet their guiding principles for investment. Both organisations have campaigned for financial education to be made more broadly available, and for people to take up financial advice.

To tie in with the research, the London Institute of Banking & Finance is focusing its efforts on promoting the need for more people to take up financial advice and consider all the options available to them to make the most of their savings, even if this means putting themselves before the next generations. 43% think that helping their children and grandchildren is an important longer term financial objective, while 47% are keen to leave an inheritance.

7IM is, meanwhile, continuing to flag that it is not just a case of getting more people to invest earlier in life, but also to think of using options beyond the cash ISAs (83%) and NS&I savings accounts (74%) that they are comfortable investing in. Instead, more of this age group should look at investing in stocks and shares (now only 40% are comfortable with this type of investment) or in the different types of funds (just 39%). The 7IM team is also asking people to look at their current approach to risk.

Previous research run by 7IM showed that investing at just one level of risk higher than a tolerance initially accepted could mean that a pension is 7% more likely to meet future financial needs. The equivalent of saving 1% more of a salary puts that likelihood at 3.8%.

However, 7IM is absolutely not advocating that people take the maximum level of risk given how personal a decision it is. Instead, the team believes that a conversation with a professional could highlight the pros and cons of the approach.

More findings of the research will be released over the coming weeks.


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The London Institute of Banking & Finance is a financial education body, established in 1879. It is a registered charity, incorporated by Royal Charter. It is an awarding body for professional qualifications in the finance sector, personal finance qualifications in schools, and for under-graduate and post-graduate degrees in banking, finance and investment. Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority and by the Jersey Financial Services Commission. Member of the London Stock Exchange. Registered office: 55 Bishopsgate, London EC2N 3AS. Registered in England and Wales No. OC378740.

The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.

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