What you need to know about retirement

Wednesday 15 February 2023

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Author: Maha Khan Phillips

Henrietta Grimston is an Associate Director of Financial Planning at Evelyn Partners. During CFA UK’s ‘In Conversation Podcast’, Grimston talked to Maha Khan Phillips about what the future of retirement is going to look like, and why planning early is critical for individual retirement outcomes.

There’s a well-known Benjamin Franklin quote, 'There’s nothing certain in life except death and taxes'. For the majority of us however, there is, or will be something in between: retirement. How we prepare for that retirement is critical, believes Henrietta Grimston, Associate Director of Financial Planning at Evelyn Partners. Not only are we living longer, but the whole notion of retirement is changing, she said.

“Because we’re all living longer, it means we need to think about funding a longer life. And I suppose there’s the two sides. One is thinking about your career and how long you might be working for, and that might be because you are forced to work longer or because you choose to work longer,” she said.

Challenging Paths to Retirement

Grimston highlighted some of the research conducted by Evelyn Partners, entitled 'Decades of Change for Life Milestones', on changing retirement themes. Baby Boomers, those between 58 and 76, have postponed retirement by an average of four years already, while 25% have ‘unretired’, given the challenging financial landscape. The Baby Boomers and generation just after are ‘sandwich’ generations, likely to have children or older parents to look after, as well as mortgages to pay off.

“So [they are] really squeezed on both sides, and the cost of living crisis will not be improving the situation for them at all,” she said.

The report also finds that many adults today are failing to recognise how longer life expectancy will impact their ability to retire at a similar age to previous generations. Gen Z (aged 18-24) and Millennials (aged 25-34) aim to retire at the age of 60, but for many, this is an unrealistic expectation.

“If you’re one of those lucky people in the top sort of one or two percent of earners in the UK, and money is not an issue, you probably can stop working at a relatively young age, but that’s not really where the vast majority of us are going to find ourselves,” she said.

She also highlighted changes in marriage rates. Only one in three adults see marriage as a major life goal. The implications are significant, in that by foregoing marriage, couples could be missing out on some of the legal benefits and tax protections on offer at the moment. Until the regulatory landscape catches up and changes, there are key considerations for couples, she said.

“There’s a shift that needs to happen in the legal system. So the way a lot of the current legislation works is that it favours a married couple or those in a civil partnership. So if we’re going to be the exception rather than the norm, you would hope that in time the legal system keeps pace.”

But until changes occur, it’s even more important for those who aren’t in a marriage or civil partners to think about issues like structuring a will, and power of attorney, she said. 

Grimston also highlighted the way that technology is changing retirement. On the one hand, it is a positive force, with an increasing number of tools helping people plan for their futures, for example by undertaking  financial modelling.

However, by 2040 advances in technology will also see a disruption to the job market, with artificial intelligence (AI) and automation creating seismic shifts in the world of work, believes Evelyn Partners. Even over the next decade, its estimated that 30% of jobs in the UK are potentially under threat from breakthroughs in AI. 

“We might think that we’ve got a fairly secure career for life, perhaps just changing employers. But what the report picks up on is actually that may not be the case for a large number of people. It’s perhaps more of a concern for those in maybe the kind of manual labour sector. And we’ve already seen how technology has had a huge impact there,” she said. 


Henrietta Grimston,
 Associate Director of Financial Planning at Evelyn Partners. 


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