Retirement plans highlight need for regular income from investments

The changing face of retirement is highlighting the need for advisers and their clients to make investments work harder for them, research from HSBC Life (UK) Limited (“HSBC Life (UK)”) shows.

HSBC Life’s nationwide study with advisers found that on average they expect 43% of their clients to work past standard retirement ages and 29% of their clients to retire overseas underlining how advice and the use of investable capital must adapt to help support clients with achieving their plans.

Allied research with clients of advisers for HSBC Life (UK)’s report, The Three I’s of Investable Capital, in association with consultancy Technical Connection, found the trend of retiring later and potentially retiring abroad is set to grow in prominence.

Around 44% of clients working with advisers expect to work and generate income beyond standard retirement ages rising to 64% among those aged 35 to 45. Around 24% expect to or plan to retire abroad.

Research for the report underlines the pressing need for income from investments. Advisers estimate that around 45% of their clients have a current need to generate an income from their investments. They estimate that around 42% of them however are drawing on capital rather than on natural income.

Mark Lambert, Head of Onshore Bond Distribution, HSBC Life (UK), said: “The idea of a standard retirement age linking in with state pension age still resonates. It is a reasonable point in time to be used in financial planning where an adviser’s client is not ready to confirm exactly when they wish to stop working, but clearly the landscape is changing and will continue to change as will views on retiring overseas.

“The growing shift in retirement attitudes is part of the evolving way that people plan for retirement and how they use investments vehicles other than pension products in that process. Being able to generate a tax-efficient income, for example, through tax effective wrappers like onshore bonds could well contribute to the answer.”