Article How a multi-stage life could shape your clients’ advice needs

The traditional ‘three-stage’ life typically follows the pattern of education, work and retirement. But as 100-year lifespans become more common, is this still a realistic blueprint for modern living?

In our new report, ‘The Second 50 - Navigating a multi-stage life’, we explore the changing nature of later life and its many possibilities. It suggests that a longer life will fundamentally change what people should expect when it comes to education, work, and retirement. This means your clients approaching or in their ‘Second 50’ may be thinking differently about their future, how they reach their goals, and find meaning in their lives.

This article outlines some of the key findings from our research, with insights on how this might shape your clients’ advice needs in the future.

Unless otherwise stated, all statistics are from our Second 50 report. It was created through a survey of 900 workers and 100 retired UK residents in 2022 and 2023, and data from the Office of National Statistics

The transition to a multi-stage life

Official statistics show that those reaching 50 in the UK today have over 30 years ahead of them on average.¹ But life expectancy is climbing with each successive generation – one in four children born in the UK today can expect to live to almost 100.² A longer life brings exciting possibilities for your clients, such as travel, family time and new hobbies. It also lends itself to potentially having multiple careers or career breaks, and more periods of learning or upskilling.

There are already signs that working patterns are changing. In our research, only 27% envision a ‘hard stop’ retirement, where they give up working all at once. And while more people are working into later life, fewer are working in middle age:

• Employment levels for those aged 50-64 have been slowly increasing, although are not yet back to pre-pandemic levels.³
• Employment levels for those aged 65+ reached record levels in April to June 2022, largely driven by people returning to part-time work.⁴
• Meanwhile, there was a significant decrease in the employment rate of those aged between 35 and 49 years.³ This could already signal the emergence of multi-stage lives where people are taking time off to care for dependents, have a career break or study. 

It’s worth noting that while some of your clients may need to work longer or return to work for financial reasons, many will choose to do so for more positive reasons. The flexible and hybrid working trends that accelerated during the pandemic could have also made this easier to do. We cover this in more detail in the next section.

Client concerns and expectations in retirement

We found that people tend to slightly underestimate how long they’ll live, and many are underprepared for the future. Running out of money is the top concern for later life – and this isn’t without reason. In our Financial wellbeing research of over 10,000 UK residents, we found that 63% of 55 to 64-year-olds have less than £100,000 in savings to fund their later years.⁵ Far less than many of your clients may need for a moderate retirement lifestyle.

As life expectancy increases, your clients might have even more years to fund. This could put further significance on your role of preserving and/or growing their wealth for as long as possible. 

For most, however, aspirations for later life outweigh their concerns. We found that among the top aspirations for retirement were travelling, pursuing new hobbies or spending more time with family and friends. Amid the challenging backdrop of the cost of living, evolving financial obligations and social pressures, achieving this could be more of a challenge.

Fulfilling our aspirations for later life often involves a balance between what we’d like to do, our resources and the circumstances we find ourselves in. You can support clients by helping them to reflect on what’s more important to them, and build a plan that’s positive, realistic and achievable.   

There are perhaps more pressures on those in the Second 50 now than there might have been in previous generations. Because people are waiting longer to start families, couples in their 50s may still have school-age children living at home. They could also have elderly parents who need their support. The burden of intergenerational caring might make it harder for them to prioritise their own long-term savings to do the things they want in retirement. 

Financial planning can help to make sure people can afford to enjoy life without impacting their long-term living standards.

The fundamentals of a good Second 50

Our report identified five fundamental areas that your clients will need to navigate and plan for in their second 50 years of life. Here are some key takeaways which could help you to shape your advice.

Wealth

A longer life means more years to budget for. Inflation, high interest rates and uncertain investment returns can make it harder to forecast how long savings will last. With long mortgage terms becoming more common, your clients may also still be servicing debts into their 60s or 70s.

Financial advice could be crucial to making their money last in a longer life. This will likely entail all aspects of wealth management and will be highly unique to each client’s individual circumstances. From helping them understand and manage their investments and pensions, discussing the financial implications of career breaks or working longer, to the evolving circumstances they might need to prepare for.

Health

Illness, injury or disability is the main reason why those aged 50 to 64 are economically inactive in the labour market. So remaining fit, healthy and able to work could reduce the risk of money worries from early unemployment.

We found the 50-59 age group expect to spend almost a fifth (17%) of their time in retirement in ill health. And overall, 82% are somewhat or very concerned about their health in older age. Yet despite this, only a quarter had factored future social care expenses into their retirement savings needs. With Government social care reforms also delayed, conversations with your clients about planning for the cost of health and social care could be crucial in supporting their later years.

Wellbeing

Wellbeing is a personal journey and what it means to people today is likely to be quite different from  previous generations. Your clients might need help identifying their financial goals and defining what brings them joy and purpose in life. Our financial wellbeing research found that the more concrete vision an individual has of their future self, the lower their debt-to-income ratio, and the better their emergency and long-term savings. We discuss the balance of ‘money’ and ‘mindset’ building blocks to build greater financial wellbeing in our executive summary, Our insight into the nation’s financial wellbeing 2023.

A focus on wellbeing isn't just beneficial for clients. Our research with 250 advisers found that gaining a deeper understanding of your clients’ needs and what motivates them might help you to be more successful. 43% of ‘wellbeing maximiser’ advisers reported high profit margins, compared with 35% of ‘performance maximisers’ who focus on investment performance and money matters.⁶

Work

Expectations around work and retirement are shifting, and your clients may need support to evaluate their options. This could be regarding a career change, career break or a return to education – all of which may have financial implications to address.

For those re-entering the workforce or planning to work long in part-time or temporary positions, they may turn to you for guidance on tax and pension implications if claiming benefits. Later-life career changes, entrepreneurship or volunteering are also possibilities they might wish to explore.

Family

Many of your clients approaching or in their second 50 are in what’s known as the ‘sandwich generation’ – where they’re financially supporting both older and younger dependants. Around 1.3 million people in England and Wales started families later in life and now have these dual caring responsibilities.⁷ The current cost of living and high housing costs might also add an additional financial burden, with young adult children staying in the family home for longer. Clients in multi-generational households and blended families may be financially complex and require additional support.

50 more years of possibilities

With improvements being made in healthcare and living standards, it could offer us many more years of life which is something worth celebrating. You can play a vital role in helping your clients prepare financially and mentally for a longer, more enjoyable, multi-stage life.

Read the full report ‘The Second 50 - Navigating a multi-stage life’.