What next for long term savings?

Financial Advisory

Emily Landless

Advisory DistributorsAlternativesEmerging MarketsExperienceFinancial AdvisoryJourneyReal EstateSegementation

When advising a client on a long term savings strategy, choosing the right tax wrapper is just as important as choosing the right investment strategy.

Headlines:

  • It is no longer the case that all long term savings are linked to earnings.
  • Cash savings have increased dramatically.
  • The Property Market has had a massive affect on Long Term Savings.
  • Divorce has affected property ownership, particularly between the ages of 34 and 54.
  • In the participants’ opinion, the younger generation may not want to get into the property market (in London this is the case now).
  • 39% of millennials would rather invest in cash.
  • Auto Enrolment has made people have conversations about savings.
  • Restrictive Pension Allowances have crashed investment into Pensions.
  • Most investment in ISAs is in Cash.
  • Average ISA investment is just £6000.

Key issues and challenges:

  • As a lot more women than men live beyond the age of 90, what advice do they need post retirement, particularly without an annuity?
  • What should you do if a Pension Fund is more of an IHT planning solution?
  • There is an education issue around Auto Enrolment. People are happy to opt in but make no additional investment.
  • Creating a different asset allocation post retirement.
  • What products should people be investing in and withdrawing from, and in what order: pensions / ISAs / GIAs / Offshore Bonds…

Conclusions and solutions:

  • For women post retirement (obviously depends on circumstances):

     - Advice needs to be holistic.

     - If they only have a pension, then income from pension.

     - What do the beneficiaries want?

     - If in care = big problem.

  • Equity Release is now playing a large part in providing for retirement.
  • Education is a massive issue and the Financial Services Sector is very poor at communication.
  • People often see IFAs for income advice – they want to know that they can do the things they want to do.
  • Is it true that the younger generation may prefer to rent property as they do for music, cars, etc…?
  • The reasons for low amounts being invested in ISAs may be:

     - The Government’s Help to Buy scheme.

     - Salaries haven’t increased.

     - People would rather spend money elsewhere.

  • There has never been a better time when people need to take professional financial advice.

Expert: Paul Speight - Canada Life

Facilitator: Paul Miles - Silverback Consulting  


Owen James Group

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