Posted by John Pengilley, Solicitor
Planning for retirement?
Retirement has been changing; with longer life expectancy, changing working habits and older generations increasingly assisting younger generations. For those planning their futures, it can be essential to take estate planning advice, make Lasting Powers of Attorney and keep an up to date Will.
How has retirement been changing?
Broadly speaking, in the past, people would work until their mid-sixties, retire, and then die in their early 70s. Therefore, retirement was a relatively short-lived affair!
Due to improvements in lifestyle and medical care, people are living longer (generally, 10 years longer than they were 50 years ago). Consequently, the approach to retirement has been changing.
There is no longer a default retirement age of 65 where people are forced to retire. In 1995 around 5% of people aged over 65 worked. Today, this has doubled to roughly just over 10%. It is probable that this trend will continue. The majority of over 65s who still work do part-time work.
Why are more people aged over 65 continuing to work?
The reasons for continuing to work includes enjoying the social aspects of work, planning for the future, funding lifestyles, doing so out of necessity and assisting children/grandchildren financially.
Why are older generations assisting younger generations?
The wealth gap between generations has been widening. Ten years ago those aged 60-62 had 6 times more net household property wealth than those aged 30-32. Today, this divide has risen to being 17 times greater. Generally, high housing costs, increasing student debt, and low wage increases since the financial crash of 2008 have contributed to this divide.
It has been reported that 3 in 5 homebuyers aged under 35 have received financial help from family and friends. Interestingly, only 23% of those giving financial assistance to their children/grandchildren took any kind of advice before doing so.
What can be done to help plan for the future, including retirement?
Retirement can seem a tricky business as people are balancing saving enough assets for an unknown future period, spending on enjoying their retirement, and then also assisting their younger family members. Having Lasting Powers of Attorney, keeping Wills up to date, and seeking estate planning advice and financial advice will help people to achieve what they want to in retirement.
Estate planning and financial advice can minimise the tax payable by someone’s estate but will also assist them with knowing what assets are personally needed for the future, which assets could be passed down the generations, and the best way in which such assets can be passed on.
Up to date Wills ensure that someone’s assets go to who they want them to, and can involve trusts to help protect assets.
Lasting Powers of Attorney allow people to choose who will look after them (financially and medically) if they lose mental capacity.
For more information, please contact a member of our Private Client department on:
0800 923 2070 Email us