Key facts
- Quilter CEO Steven Levin warns of a significant retirement crisis in the UK.
- Inflation, policy changes, and income erosion are increasing retiree vulnerability.
- Retirees receiving financial advice report higher income satisfaction and financial resilience.
- Only 43% of UK retirees currently receive financial advice, with lower rates for lower-income groups.
- The FCA is proposing a targeted support regime to address the advice gap.
Quilter CEO Steven Levin has warned of an impending retirement crisis in the UK, stating that a combination of inflation, policy shifts, and eroding incomes is leaving many retirees vulnerable. He emphasized that the traditional defined benefit pension model is increasingly rare, replaced by a complex landscape for retirees to navigate.
Research from Quilter indicates that while average retiree incomes and spending appear stable on the surface, a deeper story of uncertainty exists. Many retirees are concerned about maintaining their standard of living, with income uplifts from the state pension falling below inflation rates. The firm's inaugural Retirement Lifestyle Report, surveying over 5,000 UK retirees, found that financial advice plays a crucial role in enhancing retirement preparedness and confidence.
Advised retirees are more likely to have diversified income, tax-efficient strategies, and a clear asset management plan. They also demonstrate greater responsiveness to financial changes. Satisfaction with household income among advised retirees stands at 84%, significantly higher than the 41% among those who have not sought advice. Furthermore, 61% of advised retirees reported an income increase in the past year.
In contrast, unadvised retirees often resort to cutting discretionary spending or reducing support to family. The report highlights that only 43% of retirees receive advice, a figure that drops to 15% or less for lower-income groups, underscoring the need for broader access to financial support. Quilter welcomes the FCA's proposals for a targeted support regime to help bridge the gap between full financial advice and no support at all.