Late financial bloomers to 'change the face of retirement'

Late financial bloomers could "change the face of retirement", Canada Life has said, after industry research suggested that whilst they currently represent just 6 per cent of the market, this is expected to grow “significantly” over the next 15 years.

The research, carried out by Canada Life in conjunction with Trajectory, cited socioeconomic factors, such as later access to home ownership and having children later in life, as the main drivers behind the shift.

It argued that this has in turn triggered a "massive change” in how these consumers plan for and live through retirement.

In particular, it found that first marriages are now taking place four years later than 20 years ago, with an average age of 34 amongst men and 32 amongst women.

Divorce rates also peaked 20 years later in life compared to 20 years ago, with a “notable uptick” occurring at over 60 years old.

Furthermore, more women over 40 are now giving birth each year than those under 20, potentially meaning that there will be a growing number of later financial bloomers supporting their children through education much later in life, in turn reducing their focus on retirement planning and saving.

“The rise of individualism and decreasing relevance of the social norms are driving the growth of these new groups of retirees," Trajectory co-founder and CEO, Paul Flatters, commented.

“As the timing of home buying, marriage, divorce and having children becomes increasingly flexible for most people, its impact on the journey towards retirement and the finances needed for retirement is being felt too.”

Canada Life technical director, Andrew Tully, said: “The retirement market will be disrupted by the growth of late financial bloomers; a group which only makes up a fraction of the current market but will account for a much larger proportion by 2035.

“These retirees are more likely to have less wealth when they reach the ‘typical’ retirement age and, as a result, may have to work later in life and think differently about their assets and financial planning.

“The adviser community needs to plan ahead to respond to these changing needs, considering more complex retirement journeys and adapting existing models and services in order to support this growing group.”

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