The demand for retirement advice is growing. In the fifth edition of our retirement income advice report in partnership with NextWealth, advisers estimate that retirement advice accounts for 58% of the assets they advise on – compared with 55% the previous year.1 They expect this to rise to 62% over the next three years.1

But what’s driving the demand? And what are the opportunities for you and your firm? We summarise some of the key takeaways from the report, and then discuss the two main drivers of retirement advice.

The statistics shared throughout are from our fifth retirement income advice report, ‘Managing Lifetime Wealth: retirement planning in the UK'. The study was conducted with 221 advisers and 209 advised clients between November and December 2022.

Key takeaways

As well as examining the drivers of retirement advice, the report explores other topics including client objectives and concerns, services offered, retirement advice techniques and the impact of the FCA’s Consumer Duty. Here are some of the key findings:

Modelling tools preferred over fixed withdrawal rates

Only 29% of advisers use a fixed rate to determine sustainable withdrawals, down from two-thirds in 2018. The majority of advisers now use modelling tools to set withdrawal rates.

Services offered

Beyond retirement planning, advisers are most likely to have supported clients with claiming State Pension and other entitlements or helping them with wills and trusts.

Annuity recommendations are rising

46% of advisers say they are recommending an annuity more often than they did 12 months ago.

Defined benefit (DB) transfer advice is in decline

Only 22% of advisers still provide DB transfer advice, down from 60% in 2018. Of this 22%, a third expect to stop or significantly reduce this activity over the next 12 months.

Client objectives

The most common client objective is to use savings to create a sustainable lifetime income while preserving all or part of their capital, with 87% of advisers saying this applies for most or some of their clients.

Consumer Duty

The areas where advisers are most likely to make changes as a result of the Consumer Duty are how they communicate with clients and how they quantify the value of their advice. We’ve released further articles and videos specifically on the impact of Consumer Duty on financial advice which you can find on our retirement advice hub.

What’s driving the demand for retirement advice?

Respondents identified two key developments as driving the greatest demand for retirement advice:

1. The cost of living and market volatility

Last year, we saw that changing attitudes to work were a key driver for retirement advice as clients reassessed their priorities during the pandemic. This year, the current economic environment (the cost of living and market volatility) is expected to be the largest driver, with 57% of advisers expecting an increase for this reason. Advised clients also share this view – 75% say the economic climate of the past year has made them consider one or more of the following:

  • Changing their level of investment risk
  • Reviewing how much or when they might pass on money to others
  • Changing the level of retirement income they take

While economic uncertainty is driving the need for advice, it’s also tops the list of advisers’ concerns for their retirement advice business in the coming 12 months. If this is a concern for you – for example if you’re worried about managing client expectations – it could be a good time to assess your resources and approach to make sure you’re well equipped to manage any challenges that come your way.

2. Changes to social care funding

Changes to social care funding was reported as the second biggest driver for retirement advice, with 42% of advisers anticipating a change in demand. Although our research was carried out before the government's 2 year delay of the new social care funding deal, it demonstrates a key area of opportunity for advisers. And the demand somewhat outstrips the supply. 58% of advised clients have received advice on social care funding or are interested in doing so, but only 44% of advisers offer it. Now that the funding deal is delayed until 2025, this could give you time to implement this type of advice into your offering.2

View the full report and additional resources

In addition to the full report, we’ve released a range of materials that dig deeper into our findings. Against the backdrop of a cost of living crisis and uncertain macroeconomic outlook, we explore the role this is playing in demand for retirement advice. We’ve also released a panel series of videos delving into the research trends with a big focus on hot topics such as the New Consumer Duty.

You can find the report and the video series on our retirement advice hub.

  1. Managing Lifetime Wealth: retirement planning in the UK. Page 7. The study was conducted with 221 advisers and 209 advised clients between November and December 2022. Data source, NextWealth. Published February 2023.
  2. Charging reform: government response to the consultation on ‘implementing the cap on care costs’ operational guidance. Data source, GOV.UK, January 2023.



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