Article How living longer could affect your clients' advice needs

Generation by generation, on average, people in the UK are living longer.¹ In doing so, those of us in our 50s and beyond – or our Second 50, as we like to call it – are being presented with a variety of new opportunities and challenges associated with greater longevity. From changing family dynamics and health considerations, to evolving work patterns and retirement goals, many are choosing a flexible approach for the future.

As their adviser, you’re closer than most to the needs, experiences and decisions that define how your clients live, work, raise their families, save and retire. For your clients in their Second 50, in particular, you may see first-hand how living longer leads many to think differently about their future, how they reach their goals, and find meaning in their later lives. However, helping them to achieve all of this starts with developing a deeper understanding of what your clients may need, aspire to, and are concerned by in later life.

The second edition of our Second 50 report

We’ve recently launched the second edition of our thought-leading report, ‘The Second 50: Navigating a multi-stage life’. Based on a new survey of 900 UK workers and 100 retirees, this research explores what a longer life could mean for your clients and their plans for their later years.

This article will introduce you to the key concepts of the Second 50 and a ‘multi-stage’ life, sharing insights into how your clients view key aspects of later life in the modern age and how this could shape their advice needs in the future.

Unless otherwise stated, the research presented in this article was conducted by Aegon in July 2024, in a study that was nationally representative of UK age, gender and regions.

What is the Second 50 and a ‘multi-stage’ life?

The ways in which we approach key aspects of life are evolving, as we seek to balance our time and make the most of our later years. At the forefront of this evolution are those approaching or already in their Second 50. Presented with a realistic chance of living longer than previous generations, they’re developing new ways of raising their families, working and preparing for later life.

The result is that many in their Second 50 are now living highly varied, ‘multi-stage’ lives, defined by a blurring of responsibilities and challenges in managing resources to meet their needs. Here are some examples of how this new way of living could be affecting your over-50 clients:

• Average life expectancy for a 50-year-old in the UK is now 86, meaning they’ll likely have a further 36 years to plan for, finance and enjoy.²
• We’re having children later and are financially responsible for them for longer too, with the number of families in England and Wales in which adult children live with their over-50 parents rising 13.6% between 2011 and 2021.³
• At the same time, we’re also looking after our ageing parents as they live longer, with 1.4 million people in the UK – the majority of which are aged 45-64 – now considered part of the ‘sandwich generation’, a term for those who have caring responsibilities for both younger and older family members.⁴
• Possibly to meet the financial demands of our growing responsibilities, we’re choosing to work for longer too, with the number of UK workers aged 65+ increasing by 36% between 2014 and 2022.⁵

How is the Second 50 affecting your clients' relationship with retirement?

With so many responsibilities to juggle over an increasing number of years, it’s no surprise that those approaching or in their 50s are facing a changing relationship with their work and how they transition into retirement.

Our Second 50 research, featuring the views of 900 UK workers and 100 retirees, found that only 28% of people now envision a clean break from full-time employment into full-time retirement. Instead, many now favour a longer and more gradual transition out of the workplace via flexible work arrangements, such as part-time or temporary contracts (40%). Surprisingly, almost a quarter of people plan to never stop working, maintaining some form of paid employment throughout their life (22%).

The motivations for working longer appear to be largely positive, which can only be a good thing for your current and future Second 50 clients. Half of workers say it’s because they want to keep their brain active (50%), while 42% simply enjoy their work and working life. However, a further 23% do so out of fear they’ve not saved enough.

For advisers, this could mean you see a growing number of clients opting to delay their retirement in order to earn and save for longer. Pensions, particularly workplace pensions, could benefit from this change, potentially enabling clients to accumulate larger savings by the time they eventually retire. This would open new opportunities in how you support them to balance their financial resources and personal needs or desires, including making up for any savings shortcomings and funding the unique demands of a modern Second 50.

Understanding your clients' aspirations and concerns for later life

Providing the best possible advice begins with a clear understanding of what your clients’ need, want to achieve, and worry about – including how each of these could possibly change and evolve over time.

When it comes to retirement and later life, we found that people across the UK share a number of goals. In particular, our survey respondents indicated that travelling and spending more time with friends and family are the joint most popular aspirations for later life (both 54%). A further 37% said they hope to pursue new hobbies during their well-earned retirement. As a result, you may find that many of your clients come to you for help in planning their finances with these goals in mind.

However, amidst current difficult circumstances – high cost of living, change of government, growing financial and care responsibilities – people recognise that achieving these goals could be a challenge.

Notably, financial concerns weigh heavily on those looking to the future, with almost half saying that they fear running out of money in later life (44%). In fact, over a quarter aren’t confident they’ll be able to retire into a lifestyle they consider comfortable (28%). This concern is also compounded by the fact we’re likely to live longer, too. With an increased number of years to live and fund, there may be greater significance placed on your role in helping clients to preserve or grow their wealth for as long as possible.

Fears regarding greater longevity were also evident in the fact that declining physical health was the number one most common concern for later life (45%). It’s important to recognise that greater life expectancy doesn’t necessarily mean greater healthy life expectancy, with our own and others’ health likely to decline as the years advance.

Supporting your clients' Five Fundamentals

Fulfilling our aspirations and overcoming our fears for later life often involves a balance between what we’d like to do, the resources we have at our disposal, and the circumstances we find ourselves in. To achieve this, you can support your clients by helping them to reflect on what’s most important to them, before building a financial plan that’s positive, realistic and achievable.

Those in their Second 50 face even greater challenges in finding that balance, under increasing personal, social and financial pressure to keep on top of a wide array of ever-evolving responsibilities over a growing period of time. However, our research identified a small number of key aspects that could define how your clients plan for, navigate and make the most of their Second 50 – we call these the Five Fundamentals. Here are some key takeaways for how you could use them to shape your advice.

Wealth

Predicting the future is difficult at the best of times, but long-term fluctuations caused by inflation, interest rates, investment returns and client needs can make financial planning even more challenging.

A longer life means more years to budget for and fund, and financial advice could be crucial to making your clients’ money last over the course of their extended lifetime. From ensuring sustainable pensions contributions and understanding decumulation options, to contingency planning and pursuing their top priorities, Second 50 planning will likely entail all aspects of wealth management and be highly unique to each client’s individual circumstances.

Health

Between 2019 and 2023, sickness was the most common reason as to why people aged 50 to 64 were economically inactive within the labour market.⁶ Considering our research shows that people in this age bracket want to keep working for longer, taking action to look after their fitness and health could help them to achieve this goal.

Beyond work, our survey also found that people expect to live almost a third of their retirement in ill-health (32%), which raises questions of how they’ll support themselves. As their adviser, you may increasingly need to factor social care costs into your clients’ financial plans – particularly as we found that only 22% of people have considered such health costs within their retirement savings.

Wellbeing

Wellbeing is possibly the most personal of the Five Fundamentals, encompassing how we feel about ourselves and our circumstances. It’s a broad subject too – things we derive our wellbeing from could be tangible experiences, such as travelling to new places or more emotion-led targets, like ‘being financially responsible’.

For advisers, supporting your clients to improve and maximise their wellbeing is about developing an understanding of what brings them joy and purpose, and then helping to manage their finances in a manner that enables them to realise these goals – both now and in the future. Our financial wellbeing research found that individuals with a more concrete vision of their future self had better long-term savings than those whose plans were less defined. This may be something you can help them with.

At the same time, your business could benefit in this space, too. We found that advisers who took a wellbeing-led approach to financial advice were more likely to report high profit margins than those who favoured financial performance. You can read more about how balancing ‘money’ and ‘mindset’ building blocks can help to build greater financial wellbeing in our executive summary, Our insight into the nation's financial wellbeing 2024.

Work

As more people in their Second 50 choose to work longer and retire later, there are many new financial implications to consider. Your clients could be paying into their workplace pensions for longer, requiring your help to understand how much they should be contributing, whether consolidation is right for them, and what their income options are.

Adopting new work patterns to accommodate rising care responsibilities could see earnings change too, increasing the need to protect current and future income sustainability, as well as greater demand for guidance on managing possible tax and pension impacts.

Family

As many of your clients who are approaching or already in their Second 50 may sit within what is known as the ‘sandwich generation’ – people who bear care responsibilities to both younger and older dependants. This brings with it a number of financial challenges, notably in how they can support themselves as the cost of looking after others grows over a longer period of time. Clients in multi-generational and blended households could also present more complex financial circumstances, as disparate needs, resources and goals are juggled under one roof.

50 years of possibilities

The Second 50 presents many challenges to how you and your clients manage their financial matters, but it also opens up opportunities for how we all live, enjoy and fund our later years. A longer life is something to celebrate, and you can play a vital role in helping your clients to prepare for all of the adventures to come.

For more information on how our relationship with later life is changing and what it could mean for your business, you can visit our Second 50 hub for further resources and support – including the opportunity to earn 30 minutes of CPD time with our handy read-through.